The IRS announced yesterday that the maximum annual employee contribution to a health care flexible spending account plan is increasing by $50 to $2,550 for 2015 (up from the $2,500 limit that has applied since 2013).
Employers that sponsor health care FSAs should take this increase into account in preparing for open enrollment, and may need to revise their employee communication materials, depending on whether the employer wishes to adopt the higher limit for 2015. If the open enrollment period has already begun, the employer may need to reach out to employees who have already made their elections.
In addition, the employer’s Section 125 Cafeteria Plan document may require an amendment, depending on the language in the document. For example, the Plan document may include language that automatically increases the maximum contribution when the IRS increases the limit (but the employer may not want to increase the maximum contribution at this time), or the language may not include an automatic increase (but the employer may wish to increase it for 2015).