The IRS Chimes In
Posted on: 1/12/2017 11:13 AM
Recently, the IRS announced the 2017 annual inflation adjustments for Flexible Spending Account plans.
Revenue Procedure 2016-55 provides details about these annual adjustments.
Please take note of the following adjustments that may impact your FSA, QTB or HSA plans administered by Lifetime Benefit Solutions:
- For the taxable years beginning in 2017, the dollar limitation under § 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements is $2,600.
- For tax year 2017, the monthly limitation for the qualified transportation fringe benefit remains unchanged at $255, the same monthly limitation applies to qualified parking benefits.
As a reminder, in Revenue Procedure 16-28, the IRS set forth new Health Savings Account amounts, which are as follows:
- For calendar year 2017, the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,400. For calendar year 2017, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $6,750.
- For calendar year 2017, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600
for family coverage, and the annual out-of-pocket expenses
(deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,550 for self-only coverage or $13,100 for family coverage.
We understand that 2017 open enrollment materials may have already been prepared and distributed to your employees. However, rest assure that we’ll work with you to ensure that plan changes are made in accordance with your plans.
Unless we’re otherwise notified, the following changes to your plan(s) will take place for 2017:
- If your FSA plan maximum for 2016 is less than the current $2,550 maximum, we will not make any changes to the plan maximum.
- If your FSA plan maximum for 2016 is equal to the current $2,550 maximum, we will update your plan limits to reflect the new