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ACA Compliance Bulletin: Health FSA Limit Will Increase for 2020

The Affordable Care Act (ACA) imposes a dollar limit on employees’ salary reduction contributions to health flexible spending accounts (FSAs) offered under cafeteria plans. This dollar limit is indexed for cost-of-living adjustments and may be increased each year.

On Nov. 6, 2019, the Internal Revenue Service (IRS) released Revenue Procedure 2019-44 (Rev. Proc. 19-44), which increased the health FSA dollar limit on employee salary reduction contributions to $2,750 for taxable years beginning in 2020. It also includes annual inflation numbers for 2020 for a number of other tax provisions.

Read the Compliance Bulletin.

Contact your Cowden representative for more information on this or other compliance issues.