Flexible Spending Accounts (FSA’s)
IRS Revises 2015 FSA Amounts
On Thursday, Oct. 30, 2014, the Internal Revenue Service released annual cost-of-living adjustments for 2015. The annual allowable dollar limit on employee contributions to employer-sponsored health care flexible spending accounts (FSA) will increase to $2,550, effective for plan years beginning on or after Jan. 1, 2015.
Plan sponsors are not required to adopt the new limit. Many employers were in the middle of or had completed open enrollment by the time the IRS announced the increase therefore making it difficult to implement for 2015.
Employers wishing to adopt the new contribution limit for 2015 will need to notify their UnitedHealthcare account coordinator or implementation analyst to make the necessary changes. UnitedHealthcare will need to be aware of this plan change prior to accepting 2015 enrollment files. Employers adopting this new limit for 2015 will also need to determine if their plan document automatically adopts increases imposed by IRS adjustments or if their plan must be amended to reflect the new limit for 2015.
As a reminder, a health FSA plan design could allow employer contributions and applicable carryover balances to exceed the employee contribution maximum of $2,550 if an employer plan has the $500 carryover provision.
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