employee benefit plan limits for 2020Many employee benefits are subject to annual dollar limits that are periodically increased for inflation. The Internal Revenue Service (IRS) recently announced cost-of-living adjustments to the annual dollar limits for various welfare and retirement plan limits for 2020. Although some of the limits will remain the same, there will be an increase for most of the employee benefit plan limits for 2020.

The annual limits for the following commonly offered employee benefits will increase for 2020:

  • High deductible health plans (HDHPs) and health savings accounts (HSAs);
  • Health flexible spending accounts (FSAs);
  • Transportation fringe benefit plans; and
  • 401(k) plans.

Employers should update their benefit plan designs for the new limits and make sure that their plan administration will be consistent with the new limits in 2020. Employers may also want to communicate the new benefit plan limits to employees.

HSA and HDHP Limits

HSA Contribution Limit

Limit 2019 2020 Change
Self-only HDHP coverage $3,500 $3,550 Up $50
Family HDHP coverage $7,000 $7,100 Up $100
Catch-up contributions* $1,000 $1,000 No change

*Not adjusted for inflation

HDHP Limits

Limit 2019 2020 Change
Minimum deductible Self-only coverage $1,350 $1,400 Up $50
Family coverage $2,700 $2,800 Up $100
Maximum out-of-pocket Self-only coverage $6,750 $6,900 Up $150
Family coverage $13,500 $13,800 Up $300

 

FSA Limits

Limit 2019 2020 Change
Health FSA (limit on employees’ pre-tax contributions) $2,700 $2,750 Up $50
Dependent care FSA (tax exclusion)* $5,000 ($2,500 if married and filing taxes separately) $5,000 ($2,500 if married and filing taxes separately) No change

*Not adjusted for inflation

 

Transportation Fringe Benefits

Limit (monthly limits) 2019 2020 Change
Transit pass and vanpooling (combined) $265 $270 Up $5
Parking $265 $270 Up $5

 

Adoption Assistance Benefits

Limit 2019 2020 Change
Tax exclusion (employer-provided assistance) $14,080 $14,300 Up $220

 

Qualified Small Employer HRA (QSEHRA)

Limit 2019 2020 Change
Payments and reimbursements Employee-only coverage $5,150 $5,250 Up $100
Family coverage $10,450 $10,600 Up $150

 

401(k) Contributions

Limit 2019 2020 Change
Employee elective deferrals $19,000 $19,500 Up $500
Catch-up contributions $6,000 $6,500 Up $500

For more information, see:

GTM makes it easy for our clients’ employees to enroll in benefit plans and track their coverage through iSolved. The enrollment process increases employee engagement, and includes checks and reporting to help smooth out the complexities of your open enrollment period. Request a free demo to learn more.

 

© 2019 Zywave, Inc. All rights reserved.


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