Yesterday the IRS announced that the annual FSA election cap will rise to $2,550 per employee in 2015. The $50 increase reflects a cost-of-living adjustment.
Before 2013, employers, rather than the law, set FSA limits. The change for 2015 marks the first inflation increase since the federal cap has been in place.
Despite no increase, last year the IRS made a landmark modification to the Flexible Spending Account “use it or lose it” rule. Employers may now allow employees to carry over up to $500 of unused amounts left in their health FSA expenses in the new year.
For questions about how to plan limits or how to implement the new carry over provision, contact your Bukaty Companies benefits consultant at 913.345.0440.