2019 Heath FSA Limit Increased

For 2019, employees can contribute $2,700 to health FSAs, up from the 2018 limit of $2,650, the IRS said in Revenue Procedure 2018-57, issued Nov. 15. The increase also applies to limited-purpose FSAs that are restricted to dental and vision care services, which can be used in tandem with health savings accounts (HSAs).

Typically, changes in the limit are issued in October, before the start of the fall employee benefits open-enrollment season. This year, the announcement comes after many employees have selected their benefits on enrollment platforms programmed with the 2018 limit. HR managers may still adjust their open enrollment platforms to reflect this change and—if their enrollment systems permit it—allow employees to increase their annual dollar contributions up to the 2019 cap. However, given the late date, some employers may choose to wait until next fall's enrollment period to adjust the FSA contribution limit upward.

Employers that decide to make the higher limit available for 2019 should inform employees about the change by providing addendums to benefits materials that have already been printed and distributed.