Yesterday, the Internal Revenue Service announced several tax code inflation adjustments for the 2020 tax year. Employers should note the new, upcoming limits for their welfare benefit plans.
- Transportation Benefit. The monthly limit for qualified parking and the qualified transportation fringe benefit will be $270, up from $265 in 2019.
- Health FSA. The dollar limit for employee salary reduction contributions to a health flexible spending account plan will be $2,750, up from $2,700 in 2019. This increased limit will apply to health flexible spending account plans with plan years beginning on or after 1/1/2020.
- Medical Savings Accounts. Self-only coverage- The term “high deductible health plan” will mean, for self-only coverage, a health plan that has an annual deductible that is not less than $2,350 but not more than $3,550, which is an increase of $50 from tax year 2019. For self-only coverage, the maximum out-of-pocket expense that is required to be paid (other than for premiums) $4,750, an increase of $100 from 2019. Family coverage- The term “high deductible health plan” will mean, for family coverage, a health plan that has an annual deductible of not less $4,750 (up from $4,650 in 2019) and not more than $7,100 (up $100 from 2019). For family coverage, the out-of-pocket expense limit is $8,650, an increase of $100 from 2019.
A copy of the publication with all the adjustments, including the schedule of adjusted penalty amounts for failing to file IRS informational returns, may be accessed by clicking here.
