IRS Releases New 2015 Limit for Health FSAs

The IRS and Social Security Administration released Rev. Proc. 2014-61, which announced the 2015 cost-of-living (COLA) adjustments that apply to health flexible spending accounts (FSAs). The new annual limit for health FSAs, including general-purpose and limited-purpose health FSAs, is $2,550 for plan years starting on or after January 1, 2015.
The $2,550 limit is prorated for short plan years (plan years that are shorter than 12 months), and any carryover amount from participants’ previous plan years may be added to the limit. The $500 carryover does not count against or affect the $2,550 salary reduction limit.
	Example: Participants may elect $2,550 for the 2015 plan year and carry over a maximum of $500 from the previous plan year, making their total account value $3,050 for the 2015 plan year.
Employers may also make non-elective contributions to participants’ accounts. Special rules apply to employer contributions, so please contact your CONEXIS representative if you have questions concerning employer non-elective contributions.