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Regulatory alert and legislative updates

IRS announces 2024 limits for flexible spending accounts (FSAs), commuter benefits and adoption assistance.

On November 9, 2023, the IRS announced the maximum 2024 plan contribution limits for health care FSAs, commuter benefits and adoption assistance. For the 2024 plan year, limits are as follows:

Health care FSA$3,050$3,200$150
Health care FSA carryover$610$640$30
Adoption assistance$15,950$16,810$860

Important details:

  • In some cases, employees can contribute up to the IRS limit and still receive employer contributions.
  • For FSA carryovers, a plan ending December 31, 2023 would allow $610 to be carried over to the 2024 plan year. Generally, an amount that rolls over into the 2024 plan year does not affect the maximum limit that employees can contribute.
  • There is no change to the dependent care FSA limit for 2024, which is $5,000 per year, if married and filing a joint return or a single parent; or $2,500 per year per parent if married and filing separately.
  • We are working to update open enrollment materials to reflect these increases.

Employees will value the additional cost-savings they can gain from these increases. Since they don't pay taxes on FSA funds, they'll save on every dollar added to their account. And, if you offer commuter benefits, your employees are now able to save more with the increased monthly expense amount for work-related commuting costs. We’re working to bring clarity and confidence to expenses so your employees can better plan for and take control of their healthcare finances.

For more information, read the IRS announcement at*

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