The ACA imposes a dollar limit on employees’ salary reduction contributions to health flexible spending arrangements (health FSAs) offered under cafeteria plans. This dollar limit is indexed for cost-of-living adjustments.
In November 2018, the IRS increased the health FSA contribution limit from $2,650 to $2,700 for taxable years beginning in 2019.
Employers should ensure that their health FSA will not allow employees to make pre-tax contributions in excess of $2,700 for 2019, and they should communicate the 2019 limit to their employees.
Questions? Contact One Source Advisors, OMA’s endorsed health care broker. 1/6/2019