IRS Announces New 2020 Limits for FSA, HSA, HDHP, and Transportation Plans
The IRS released on November 6, 2019, Revenue Procedure 2019-44 (PDF) with cost-of-living adjustments for tax-related amounts indexed for inflation. The IRS also announced the health savings account (HSA) and high deductible health plan (HDHP) annual deductible and out-of-pocket expense adjustments earlier this year in Revenue Procedure 2019-25.
New FSA Maximums
The maximum amount participants may contribute to the Health Care (and Limited Purpose) Flexible Spending Accounts in 2020 was increased to $2,750 (up from $2,700 in 2019). Additionally, the Dependent Care FSA maximum has remained at $5,000 for 2020. The Adoption Credit Limit has increased to $14,300 from $14,080. For plans with a non-calendar year effective date, the new maximum becomes effective with the next plan year.
New HSA Maximums
In 2020, individuals with self-only coverage will have a maximum of $3,550 (raised from $3,500 in 2019) to contribute to a Health Savings Account. Individuals with family coverage will have a maximum of $7,100 in 2020 (raised from $7,000 in 2019). The HSA Catch-Contribution Limit has remained at $1,000 both in 2019 and 2020.
New HDHP Maximums
The Minimum Annual Deductible for individuals with self-only coverage will increase from $1,350 to $1,400 and those with family coverage with have a minimum of $2,800, increased from $2,700. The Out-of-Pocket Expense Maximum increased from $6,750 to $6,900 for individuals and $13,500 to $13,800 for families.
New Transportation Maximums
The maximum monthly amounts participants may contribute to TSA Parking and Mass Transit plans has increased to $270 for each account (up from $265 each in 2019).
Please reference the chart below for direct comparisons related to respective plans:
| Welfare Plan Limits | ||
Plan | 2020 | 2019 |
Health FSA Max | $2,750 | $2,700 |
Dependent Care FSA Max | $5,000 | $5,000 |
Adoption Credit Limit | $14,300 | $14,080 |
HDHP Min Annual Deductible (Single) | $1,400 | $1,350 |
HDHP Min Annual Deductible (Family) | $2,800 | $2,700 |
HDHP Out of Pocket Max (Single) | $6,900 | $6,750 |
HDHP Out of Pocket Max (Family) | $13,800 | $13,500 |
HSA Max Contribution Limit (Single) | $3,550 | $3,500 |
HSA Max Contribution Limit (Family) | $7,100 | $7,000 |
HSA Catch-Contribution Limit (Not Indexed) | $1,000 | $1,000 |
TSA Parking and Mass Transit Monthly Limit | $270 | $265 |