IRS Announces 2022 Employee Benefit Plan Limits
The IRS and the Social Security Administration recently announced the cost-of-living adjustments to the applicable dollar limits on various employer-sponsored retirement and welfare plans and the Social Security wage base for 2022. The table below compares the applicable dollar limits for certain employee benefit programs and the Social Security wage base for 2021 and 2022.*
Please note that Lifetime Benefit Solutions will automatically increase the Health FSA maximum salary reduction limit for all clients except for those who have an amount less than the current maximum. The Health FSA carryover limit will only be increased if you amended your Health FSA in 2020 to include the $550 carryover limit (or as indexed in future years). If your account does not want to increase to the Health FSA maximum salary reduction limit or carryover limit, please contact your dedicated administrator.
| Health Flexible Spending Accounts | 2022 | 2021 |
| Maximum salary reduction limit | $2,850 | $2,750 |
| Health FSA Carryover Limit | $570 | $550 |
| Dependent Care Flexible Spending Accounts± | 2022 | 2021 |
| If employee is married and filing a joint return or if the employee is a single parent | $5,000 |
$5,000 |
| If employee is married but filing separately | $2,500 | $2,500 |
(2021 limits raised to $10,500 for 2021 based on the American Rescue Plan Act passed March 11, 2021)
| 2022 | 2021 | |
| Expected Benefit Health Reimbursement Arrangements | $1,800 | $1,800 |
Qualified Transportation Fringe Benefit and Qualified Parking (monthly limit) |
$280 | $270 |
| Adoption Assistance Exclusion | $14,890 | $14,440 |
| High Deductible Health Plans (HDHP) and Health Savings Accounts (HSA) | ||
| 2022 | 2021 | |
| HDHP — Maximum annual out-of-pocket limit (excluding premiums): | ||
| Self-only coverage | $7,050 | $7,000 |
| Family coverage | $14,100 | $14,000 |
| HDHP — Minimum annual deductible: | ||
| Self-only coverage | $1,400 | $1,400 |
| Family coverage | $2,800 | $2,800 |
| HSA — Annual contribution limit: | ||
| Self-only coverage | $3,650 | $3,600 |
| Family coverage | $7,300 | $7,200 |
| Catch-up contributions (age 55 or older)± | $1,000 | $1,000 |
ACA In-Network Out-Of-Pocket Limits For Non-Grandfathered Plan Note: This is different than the HDHP Maximum out-of-pocket limit described above |
||
| Self-only coverage | $8,700 | $8,550 |
| Family coverage | $17,400 | $17,100 |
| Retirement Plan Limits | 2022 | 2021 |
| Annual compensation limit | $305,000 | $290,000 |
| 401(k), 401(k) Roth & 403(b) contributions | $20,500 | $19,500 |
| Catch-up contributions (if age 50 or older) | $6,500 | $6,500 |
| Highly compensated employee threshold | $135,000 | $130,000 |
| Key employee officer compensation threshold | $200,000 | $185,000 |
| Defined benefit plan annual benefit and accrual limit | $245,000 | $230,000 |
| Defined contribution plan annual contribution limit | $61,000 | $58,000 |
| Social Security Taxable Wage Base | $147,000 | $142,800 |
Plan sponsors should update payroll and plan administration systems for the 2022 cost-of-living adjustments and should incorporate the new limits in relevant participant communications, like open enrollment materials and summary plan descriptions.
* The dollar limits are generally applied on a calendar year basis; however, certain dollar limits are applied on a plan-year, tax-year, or limitation-year basis.
± Not indexed for cost-of-living adjustments.
