Written by
Drew Gieseke
Drew Gieseke is an aPHR®-certified member of the Marketing team at Bernard Health, where he writes about HR, compliance, and healthcare solutions.
Each year, the IRS reviews contribution limits for numerous tax provisions and healthcare savings accounts. In 2021, some contribution limits were slightly increased to account for inflation while others remain unchanged. Here's a breakdown of what you need to know.
2021 HSA Contribution Limits
In June 2020, the IRS released 2021 cost-of-living adjusted limits for health savings accounts (HSAs) and high-deductible health plans (HDHPs). Read more about this change here.
| 2021 | 2020 | |
|
Individual Contribution Limit |
$3,600 | $3,550 |
| Family Contribution Limit | $7,200 | $7,100 |
| Catch-up Contribution Limit (for those over age of 55) | $1,000 | $1,000 |
| Max Individual out-of-pocket | $7,000 | $6,900 |
| Max Family out-of-pocket | $14,000 | $13,800 |
2021 FSA Contribution Limits
The IRS announced no changes to FSA contribution caps for 2021.
The maximum carryover amount was originally $550, but the 2021 Consolidated Appropriations Act (CAA)—a COVID-19 relief bill passed in December 2020—introduced new optional FSA provisions that grant employees improved account flexibility in the new year. These changes included unlimited rollovers and an extended grace period.
Learn more about FSA flexibility by reviewing this resource.
| 2021 | 2020 | |
| Contribution Max | $2,750 | $2,750 |
| Dependent Care FSA Max (for individuals or married couples filing jointly) | $5,000 | $5,000 |
| Dependent Care FSA Max (for married persons filing separately) | $2,500 | $2,500 |
2021 Commuter Benefit Limits
Commuter benefit limits will also remain unchanged for 2021.
| 2021 | 2020 | |
| Transit passes and services (monthly contribution) | $270 | $270 |
| Qualified parking (monthly contribution) | $270 | $270 |
What Else Should Employers Know?
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was passed on March 27, 2020, allocating $2 trillion in relief for American businesses and workers. Yet it also adjusted certain requirements for HSAs, FSAs, and HRAs that make it easier for people to pay for everyday medical care.
Find out what you need to know about these changes and alert your employees if applicable.
Written by
Drew Gieseke
Drew Gieseke is an aPHR®-certified member of the Marketing team at Bernard Health, where he writes about HR, compliance, and healthcare solutions.
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