Many employee benefits are subject to annual dollar limits that are periodically updated for inflation.
The IRS typically announces the dollar limits that will apply for the next calendar year well before the beginning of that year. This gives employers time to update their plan designs and ensure that their plan administration will be consistent with the new limits. Although most of the limits will increase for 2022, some of the limits remain the same.
For plan years beginning on or after Jan. 1, 2022, the following limits have increased:
- Health savings account contributions:
- Single coverage—$3,650 (up $50)
- Family coverage—$7,300 (up $100)
- High deductible health plan (HDHP) out-of-pocket maximum limit:
- Single coverage—$7,050 (up $50)
- Family coverage—$14,100 (up $100)
- Health FSA contribution limit—$2,850 (up $100)
- Health FSA carryover limit—$570 (up $20)
- Transportation fringe benefit plan monthly limits—$280 (up $10)
- Employees’ elective deferrals to 401(k) plans—$20,500 (up $1,000)
- Tax exclusion for adoption assistance benefits—$14,440 (up $140)
Certain limits will not change for 2022, including the HDHP minimum deductible and catch-up contribution limits to HSAs or 401(k) plans. The tax exclusion for dependent care FSA benefits also returns to traditional rules.
For more important compliance information, contact us.