While inflation remained low through 2016, certain key benefit plan limits have increased slightly for 2017. Last week the IRS officially announced those limit adjustments for various health, retirement and fringe benefit plans. General IRS information about these notices is available here for Health & Welfare plans and here for Retirement plans.
The IRS determined that the increase in cost-of-living index was insufficient to trigger an adjustment in many annual limits for 2016.
The IRS released 2015 annual inflation adjustments for various tax benefits including Flexible Spending Accounts. Of particular note for BPC clients, was a move to raise the Health FSA employee contribution limit for 2015 up to $2,550. That’s a $50 increase over the 2013 and 2014 limit of $2,500.
Depending on your plan document language, this change may or may not automatically apply to your plan for 2015. It’s important to be aware of whether or not it does, because the plan document will control what should be reflected on enrollment materials and other communications to your employees.
If your plan document states the annual limit for the Health FSA is $2,500, but will automatically adjust for cost of living increases announced by the IRS, then the new limit will apply to your first plan starting on or after 1/1/2015. If your plan document simply lists a static dollar amount as the limit (whether it’s $2,500 or something lower), then this new limit will only apply if you choose to amend your plan.
If the $2,550 limit applies to your plan already, then revisions to your open enrollment materials may be advisable. If the new limit does not apply yet, but you would like to change it, please contact BPC to request a plan amendment or restatement.
BPC will be happy to work with you to determine where you plan stands currently, and what open enrollment material changes may be needed. Please contact your BPC Representative by phone or email if you have any questions or need assistance. You can also contact an available representative by calling 877-272-8880 or by emailing.