In 2022, the Health FSA contribution cap will rise, impacting all businesses in New Jersey. Employees can put an extra $100 into their health care flexible spending accounts (health FSAs) next year, the IRS announced on Nov. 10, as the annual contribution limit rises to $2,850, up from $2,750. But with open enrollment for the 2022 benefits year already underway at many organizations, the increase may have come too late for some employees to take advantage of it.
If the employer’s plan permits the carryover of unused health FSA amounts, the maximum carryover amount rises to $570, up from $550, but COVID-19 relief extends the allowable carryover amount further, as discussed below.
Tax-exclusion limits for employer-sponsored commuting benefits and adoption assistance programs are also rising for 2022 due to cost of living adjustments (COLAs), the IRS announced in Revenue Procedure 2021-45.
Health FSA Contribution Cap Explained
The chart below shows the adjustment in health FSA contribution limits for 2022. Employers may set lower limits for their workers.
| Health Flexible Spending Accounts (Includes limited-purpose FSAs) | 2022 | 2021 | Change |
| Maximum salary deferral contribution | $2,850 | $2,750 | +100 |
| Maximum carryover amount *The Consolidated Appropriations Act, 2021, allowed unlimited carryovers of health FSA balances into the next plan year for plan year 2021. | $570 | $550 (as indexed, but carryover of full unused balance allowed)* | +20 (indexed amount) |
