Health and Welfare

2020 Welfare Benefit Plan Limits

Today, the IRS issued Revenue Procedure 2019-44 which provides the 2020 cost-of-living adjustments for inflation as provided by the Internal Revenue Code. For plan sponsors of welfare benefit and fringe benefit plans, the most applicable adjustments announced in Revenue Procedure 2019-44are listed in the following table:

Cafeteria Plan Limits and Thresholds
 
Health FSAs 2021 (new) 2020(old)
Maximum Health FSA Salary Reductions $2,750 $2,750
Adoption Assistance 2021(new) 2020 (old)
Maximum Exclusion for Employer-Provided Adoption Assistance $14,400* $14,300
Adoption Tax Credit Limit $14,400* $14,300
*The amount excludable from an employee’s gross income begins to phase out for taxpayers with modified adjusted gross income in excess of $216,660 and is completely phased out for taxpayers with modified adjusted gross income of $256,660 or more.
Consumer-Driven Health Care Limits and Thresholds
 
Archer MSAs 2021(new) 2020 (old)
High Deductible Health Plan Deductible‒Single
Minimum $2,400 $2,350
Maximum $3,600 $3,550
High Deductible Health Plan Deductible‒Family
Minimum $4,800 $4,750
Maximum $7,150 $7,100
High Deductible Out-of-Pocket Maximum
Single $4,800 $4,750
Family $8,750 $8,650
HSAs 2021 (new) 2020 (old)
HDHP Minimum Annual Deductible
Individual $1,400 $1,400
Family $2,800 $2,800
HDHP Out-of-Pocket Maximum
Individual $7,000 $6,900
Family $14,000 $13,800
HSA Maximum Contribution Limit
Individual $3,600 $3,550
Family $7,200 $7,100
HSA Contribution Limit $1,000 $1,000
QSEHRAs 2021(new) 2020(old)
Maximum Reimbursement Allowed
Single $5,300 $5,250
Family $10,700 $10,600
Fringe Benefit Limits and Thresholds
 
Adoption Assistance 2021(new) 2020 (old)
Maximum Exclusion for Employer-Provided Adoption Assistance $14,400* $14,300
Adoption Tax Credit Limit $14,400* $14,300
*The amount excludable from an employee’s gross income begins to phase out for taxpayers with modified adjusted gross income in excess of $216,660 and is completely phased out for taxpayers with modified adjusted gross income of $256,660 or more.
Transportation Fringe Benefits 2021(new) 2020 (old)
Parking $270/mo. $270/mo.
Transit Passes & Vanpooling (combined) $270/mo. $270/mo.

Open enrollment for many employers may have already passed, and employees may have elected benefits based on the 2020 limits due to the late announcement of these 2020 limits. Revenue Procedure 2019-44 does not contain any expressly stated relief to employees who have made their elections without knowing the new 2021 limits.

Be sure to check www.nbsbenefits.com/limits for the latest information on all limits related to retirement, health, and welfare benefit plans as well as consumer-driven health care.