Contributions to your Flexible Spending Account are done via a pretax, payroll deduction to help offset the costs of some qualified medical expenses. The maximum contribution amounts and deadlines are set by the Internal Revenue Service (IRS). Normally, your Flexible Spending Account or FSA pretax contributions are forfeited at the end of your plan year, typically December 31. Unfortunately, due to the current pandemic, it has become more difficult to properly utilize these accounts. This has led the IRS to change some rules which cover deadlines and rollovers that may benefit you. We here at HPFY can shed some light on these changes and help you maximize your FSA account.
In a normal world, the IRS sets maximum contributions, rollover amounts, and deadlines for those with FSA accounts. Sadly, the last 18 months or so has not been “normal.” The Covid-19 pandemic has turned the world upside down and our healthcare too. Typical FSA contributions/deadlines include:
Due to the current pandemic, the IRS has loosened some of these guidelines for employers. While these changes have been made by the IRS, it is your employer who must have decided to offer them to their employees. These changes were enacted due to the Consolidated Appropriations Act (CAA 2021) passed by Congress. These changes included:
Here’s a breakdown for the 2023 contribution year compared to 2022 from the IRS.gov website:
Health Plan Limits |
2023 |
2022 |
Health FSA Contribution Limit |
$3,050 |
$2,850 |
Health FSA Carryover Limit |
$610* |
$570 |
HSA Contribution Limit (Individual) |
$3,850 |
$3,650 |
HSA Contribution Limit (Family) |
$7,750 |
$7,300 |
HSA Catch-Up Contribution Limit (age 55-plus) |
$1,000 |
$1,000 |
HDHP Minimum Deductible (Individual) |
$1,500 |
$1,400 |
HDHP Minimum Deductible (Family) |
$3,000 |
$2,800 |
HDHP Maximum Out-of-Pocket Amount (Individual) |
$7,500 |
$7,050 |
HDHP Maximum Out-of-Pocket Amount (Family) |
$15,000 |
$14,100 |
*Special COVID-19 relief gives employers the option to allow employees to carry over their unspent 2021 FSA balance into 2022.
Employers that offer FSA plans to their employees were granted further flexibility under the Taxpayers Certainty and Disaster Tax Relief Act of 2020. Under this act, FSA plans had additional discretion in 2021 and 2022 to adjust their plans due to un-anticipated consequences of this seemingly un-ending pandemic. The IRS issued Notice 2021-15 which allowed flexibility for employers such as:
These were all great changes by the IRS to allow employers the flexibility to manage their FSA plans, but they were not required to enact any of these IRS changes and ended in 2022. You should talk to your employer or HR department to see what changes they have adopted that can maximize your FSA contributions.
Disclaimer: All content found on our website, including images, videos, infographics, and text were created solely for informational purposes. Our reviewed content should never be used for the purpose of diagnosis or treatment of any medical conditions. Content shared on our websites is not meant to be used as a substitute for advice from a certified medical professional. Reliance on the information provided on our website as a basis for patient treatment is solely at your own risk. We urge all our customers to always consult a physician or a certified medical professional before trying or using a new medical product.
Kevin Cleary has been a Health Products For You contributor for many years and has a degree in marketing. His health and wellness journey has a very personal meaning and has guided him in his content writing for HPFY.
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