Retirement plans aren’t the only benefits adjusted for 2023! Employers should also heed the following newly adjusted health & welfare annual $ limits, which similarly saw increases from 2022 in response to rising costs of living.

The IRS issued 2023 $ limits in its Rev. Proc. 2022-38 (Part III Administrative, Procedural, and Miscellaneous, 26 CFR 601.602) for qualified transportation fringe benefits, adoption assistance programs, health FSAs, and long-term care premiums, among other $ adjustments, including:

  • The annual salary contribution limit for employees with a health FSA increased to $3,050, up from $2,850. In contrast, 2023 dependent care FSA participant contribution limits are not subject to inflation and will remain $2,500 for individuals and $5,000 for married couples filing jointly.

In separate guidance (Rev. Proc. 2022-24), the IRS also:

  • Increased the annual out-of-pocket maximums for high-deductible health plans (HDHP) to $7,500 for self-only coverage and $15,000 for family coverage, up from $7,050 and $14,100, respectively. Similarly, HDHP annual deductible minimums increased to $1,500 for self-only coverage and $3,000 for family coverage, up from $1,400 and $2,800, respectively.
  • Increased HSA annual contribution limits to $3,850 for self-only coverage (up from $3,650) and $7,750 for family coverage (up from $7,300).