by Matt Gerard
on November 6, 2019
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.
