Each year in the fall, the IRS announces new employee benefit plan limits for several types of benefits that have maximums subject to annual indexing. You can find the full list of the latest released amounts for 2024 in IRS Revenue Procedure 2023-34, but we’ve outlined the most common items employers ask us about.
Health Flexible Spending Account (HFSA)
For plan years beginning in 2024, the maximum HFSA contribution limit is $3,200. For HFSAs that include a carryover feature, the maximum carryover is $640.
Qualified Commuter Plans – Mass Transit and Parking
For 2024, the monthly limits are increased to $315 for both qualified parking and mass transit.
Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)
For 2024, QSEHRAs may not reimburse more than $6,150 per year for single coverage and $12,450 for family coverage.
Adoption Assistance Programs
For 2024, the maximum tax credit and employer-provided adoption assistance that can be excluded from wages is increased to $16,810. The tax credit begins to phase out for individuals with a modified adjusted gross income above $252,150 and is completely phased out at $292,150 and above.
Benefit Plan Reminders
The dependent care FSA contribution maximum is not subject to annual indexing and remains $5,000 (or $2,500 each if the employee and spouse file separate income tax returns) for calendar year 2024.
The limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) are traditionally released earlier in the year. The limits vary based on whether an individual has self-only or family coverage under an HDHP; the 2024 limits are as follows:
| Annual HSA Contribution Limit | Self-only: $4,150
Family: $8,300 Catch-up: $1,000 (age 55 or older) |
| Minimum Annual HDHP Deductible | Self-only: $1,600
Family: $3,200 |
| Maximum HDHP Out-of-pocket | Self-only: $8,050
Family: $16,100 |
If the HDHP is a non-grandfathered plan, a cost-sharing limit of $9,450 for self-only coverage or $18,900 for family coverage will apply to Affordable Care Act (ACA) essential health benefits.
Action Items
Employers should update plan documents to reflect any relevant new contribution maximums and communicate the changes to eligible individuals.
Employee benefits through the GTM Insurance Agency combined with GTM Payroll’s HCM platform can create greater efficiencies for employees and employers when administering employee benefits. For more information or to get a quote, call (518) 373-4111.
