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2022 Health FSA Limit

Health FSA Limit

2 minute read

The IRS recently increased the health flexible spending accounts (FSAs) dollar limit on employee salary reduction contributions for 2022 plan years. According to the Affordable Care Act (ACA), a dollar limit is imposed on employees’ salary reduction contributions to FSAs offered under cafeteria plans. This dollar limit is indexed for cost-of-living adjustments and may be increased each year.

For taxable years beginning in 2022, the health FSA dollar limit on employee salary reduction contributions has increased to $2,850. The carryover limit for a health FSA has also increased to $570. It also includes annual inflation numbers for 2022 for a number of other tax provisions.

The health FSA limit applies on an employee-by-employee basis. Employees may only elect up to $2,850 in salary reductions in 2022, regardless of whether they have family members who benefit from the FSA funds. Each family member who is eligible to participate in their own health FSA will have a separate limit.

Employers should ensure that their health FSA doesn’t allow employees to make pre-tax contributions in excess of $2,850 for 2022. The new limit should also be communicated to employees during the open enrollment process.

An employer may continue to impose its own health FSA dollar limit, as long as it doesn’t exceed the ACA’s maximum limit in effect for the plan year.

Download the bulletin for more details.

Download the 2022 IRS Contribution Limits Info Sheet

This blog is intended to be a compilation of information and resources pulled from federal, state, and local agencies. This is not intended to be legal advice. For up to the minute information and guidance on COVID-19, please follow the guidelines of the Centers for Disease Control and Prevention (CDC) and your local health organizations.

National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Erin Woulfe

Erin Woulfe

Erin Woulfe likes to write about things that matter. Keeping her finger on the pulse of what’s happening in the public sector world, she blogs about the latest legislative news and employee benefit trends that affect our school, city and county clients. She’s been with NIS since 2002. “I love connecting to our clients and providing them with the tools they need in order to administrate their plan,” says Erin. “Whether that be materials to educate their employees on certain benefits, how to effectively communicate change within an organization, or providing tips and how-to’s to help them make their job easier.”