The IRS released the 2020 annual inflation adjustments. Effective January 1, 2020, the new annual Health Care FSA maximum contribution will increase to $2,750. The new monthly maximum contributions for Qualified Transportation plans will be $270.
Here’s a look at some of the other important limits:
|Health FSA Max Election ||$2,750 ||$2,700|
|Dependent Care FSA Max Election||$5,000||$5,000|
|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-Up Contribution Limit||$1,000||—|
|401(k) Retirement Plans||$19,500||$18,500|
Administratively, the timing of the announcement represents a challenge for employers that have already completed their January 1, 2020 annual enrollment periods or are well into their enrollment efforts. Available options to explore include the following:
- Modifying online systems to reflect the changes if print communications already have been released, and posting related update messaging on the page/site.
- If the schedule allows for a post-enrollment change process, issuing confirmation statements that advise employees to adjust their election during the allotted change window.
- When enrollment is open and where feasible, issuing email and text message blasts to employees informing them of the late change.
- Issuing targeted post-enrollment communications to those who elected the old maximums ($2,700 and $270) before the change was implemented, then affording this targeted group an opportunity to increase their election to the new maximum before the start of the new plan year.
To those still “planning the plan”, these increases can be folded into your base communications, enrollment processes and key open enrollment messaging. We have great resources available to assist in your communication strategy. If you’re looking to do some education, or have any questions, contact your dedicated account team for additional resources.