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IRS Releases 2019 Limits for Welfare Benefit Plans: Health FSA and HSA Limits Increase

On Behalf of | Nov 19, 2018 |

The IRS has released the 2019 inflation-adjusted limits for certain employee welfare benefit plans and the dollar amounts used for certain discrimination tests.

Health FSAs. The limit for employee salary reduction contributions for health flexible spending account coverage for 2019 is $2,700, an increase of $50 over the amount for 2018.

Health Savings Accounts. The 2019 limit on contributions to health savings accounts (“HSAs”) increases to $3,500 for a self-only HSA and $7,000 for a family HSA. For 2019, a high deductible health plan (“HDHP”) must have a minimum deductible of $1,350 for employee-only coverage, and $2,700 for family coverage. The maximum out-of-pocket amount for an HDHP (including deductibles, co-payments and other amounts, not including premiums) cannot exceed $6,750 for self-only coverage and $13,500 for a family.

Dependent Care. There were no changes to the limits for dependent care flexible spending account contributions, and the maximum tax-exempt benefit from a dependent care assistance plan remains at $5,000 ($2,500 if married and filing separately), as this amount is not indexed to inflation.

Transportation and Parking. For 2019, the qualified transportation benefit limit for transit passes and for qualified parking is $265 per month.

Highly Compensated Employee. The definition of highly compensated employee (“HCE”) is used in several welfare plan nondiscrimination tests. For the 2019 plan year, an employee who earns more than $120,000 in 2018 is an HCE. For the 2020 plan year, an employee who earns more than $125,000 in 2019 is an HCE.

PCORI. The PCORI fee will not be assessed for plan years ending after Sept. 30, 2019, which means that for a calendar-year plan, the last year for assessment is the 2018 calendar year.