On Oct. 19, 2017, the Internal Revenue Service (IRS) released Revenue Procedure 2017-58 (see page 14) which increased the FSA dollar limit on employee salary reduction contributions to $2,650 for taxable years beginning in 2018. It also includes annual inflation numbers for 2018 for a number of other tax provisions.
The health FSA limit applies on an employee-by-employee basis. Each employee may only elect up to $2,650 in salary reductions in 2018. However, each family member who is eligible to participate in his or her own health FSA will have a separate limit. For example, a husband and wife who have their own health FSAs can both make salary reductions of up to $2,650 per year, subject to any lower employer limits. In addition, if an individual has health FSAs through two or more unrelated employers, he or she can make salary reductions of up to $2,650 under each employer’s health FSA.
An employer may continue to impose its own dollar limit on employees’ salary reduction contributions to health FSAs, as long as the employer’s limit does not exceed the ACA’s maximum limit in effect for the plan year.
If your FSA Maximum is currently $2,600, Pro-Flex will automatically increase the Medical FSA maximum to $2,650 for renewal dates occurring on or after January 1st, 2018. Please contact your Pro-Flex Account Manager with any questions or concerns in regard to this change.
