Sponsors of Health FSAs Take Note: Increase in Contribution Limit Effective for 2015.
As part of the Patient Protection and Affordable Care Act, the annual limitation on health Flexible Spending Account (FSA) salary reduction contributions was set at $2,500 effective for plan years starting on or after January 1, 2013, subject to cost of living adjustments. For the first time since its effective date, the IRS has increased this annual limitation to $2,550 for 2015. Open enrollment materials for 2015 plan years should inform employees of this increase.
Employers whose 2015 open enrollment periods already have ended must determine if their plan documents and open enrollment materials provide for automatic adjustments to employee health FSA salary reduction contributions based on this increase to the annual limitation. If your open enrollment has ended, please contact a member of the Troutman Sanders Employee Benefits and Executive Compensation practice group to discuss your options.
A copy of the complete list of the inflation adjustments announced today by the IRS can be found in Revenue Procedure 2014-61. The 2015 adjustments relating to tax qualified plans announced earlier this month can be found here.
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