On October 9, 2025, the IRS announced that for plan years beginning in 2026, the health flexible spending accounts (FSAs) pre-tax contribution limit will rise to $3,400, an increase of $100 from the 2025 limit.
For 2026, the Affordable Care Act (ACA) limits employee pre-tax contributions to health FSAs to $3,400. Employers may set a lower limit, but contributions cannot exceed this federal threshold.
Employers should confirm that their health FSA contribution limit is included in plan documents and clearly communicate it to employees during enrollment.
Pre-tax Contributions
The ACA limit applies only to employees’ pre-tax health FSA contributions. Nonelective employer contributions, such as matching funds or flex credits, generally do not count toward this limit, unless employees have the option to receive them as cash or taxable income, in which case they are treated as salary reductions and included in the limit.
Per-employee Limit
The health FSA limit is $3,400 per employee for 2026. Each employee may elect up to this amount through salary reductions, regardless of family coverage. If both spouses have their own health FSAs, each may contribute up to $3,400, subject to any lower employer-imposed limits.
Health FSA Carryovers
Employers may permit employees to carry over unused health FSA funds to the following plan year, up to a maximum adjusted annually for inflation. For 2026, the carryover limit increases to $680. Employers can set a lower limit if desired.
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