October 31, 2014 – IRS Announces 2015 Cap on Salary Reduction Contributions to Health FSAs
Yesterday the IRS announced the inflation-adjusted cap on salary reduction contributions to health flexible spending accounts (health FSAs) for 2015. See http://www.irs.gov/uac/Newsroom/In-2015,-Various-Tax-Benefits-Increase-Due-to-Inflation-Adjustments. For plan years beginning in 2015, participants may make salary reduction contributions of up to $2,550.
Employers that wish to take advantage of the increased cap should review their health FSAs to determine whether an amendment is needed. If the health FSA does not automatically incorporate adjustments to the cap (i.e., the health FSA includes a fixed maximum of $2,500), the health FSA should be amended to increase the cap before the start of the 2015 plan year. HitesmanLaw, P.A. will be making available for purchase a simple amendment increasing the plan’s maximum.
If you would like more information regarding the limit on salary reduction contributions to a health FSA or are interested in purchasing the amendment, please contact us.
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