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What to Know About HSA, FSA, Commuter Benefit Limit Changes for 2021

What to Know About HSA, FSA, Commuter Benefit Limit Changes for 2021

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 is $550.

  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 HSAsFSAs, 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.

HR Party of One Guide to 1095-Cs

 
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