Many employee benefits are subject to annual dollar limits that are periodically updated for inflation by the IRS. The following commonly offered employee benefits are subject to inflation-adjusted dollar limits:
- High deductible health plans (HDHPs) and health savings accounts (HSAs);
- Health flexible spending accounts (FSAs);
- 401(k) plans; and
- Transportation fringe benefit plans.
The IRS typically announces the dollar limits that will apply for the next calendar year well in advance of the beginning of that year. This gives employers time to update their plan designs and make sure their plan administration will be consistent with the new limits.
This Compliance Overview includes a chart of the inflation-adjusted limits for 2019. Although some of the limits will remain the same, many of the limits increase for 2019.
|HSA Contribution Limit|
|Catch-up contributions*||$1,000||$1,000||No change|
|HDHP Minimum Deductible|
|HDHP Out-of-pocket Maximum|
|Limit on employees’ pre-tax contributions||$2,650||$2,700||Up $50|
|Dependent Care FSA*|
|Tax exclusion||$5,000 ($2,500 if married and filing taxes separately)||$5,000 ($2,500 if married and filing taxes separately)||No change|
|Transportation Fringe Benefits (Monthly Limits)|
|Transit pass and vanpooling (combined)||$260||$265||Up $5|
|Employee elective deferrals||$18,500||$19,000||Up $500|
|Catch-up contributions||$6,000||$6,000||No change|
|Adoption Assistance Benefits|
|Tax exclusion||$13,840||$14,080||Up $240|
*Not subject to annual adjustment for inflation