Question of the Week

Q.- I am aware of the $2,500 maximum limit on health flexible spending account plans for plan years beginning on or after January 1, 2013. Is this maximum imposed on limited purpose FSAs also?

A.- Yes. IRS guidance does not differentiate among types of health FSAs. It is our understanding that the $2,500 salary reduction contribution limit will apply to a limited purpose health FSA, just as it would apply to a general purpose health FSA.

If the employee participates in multiple health FSAs offered by the same employer (or any employer within a controlled group), the employee's total contributions to all FSAs cannot exceed $2,500.

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