IRS Releases New Health Care FSA and Commuter Benefit Account Limits and Updates Carryover Maximum for 2024

What you need to know:

• The 2024 Health Care FSA employee contribution limit is $3,200. For Flores Health Care FSA clients currently allowing the 2023 IRS maximum employee contribution limit of $3,050, Flores will automatically adjust your Health Care FSA and Limited FSA plans to allow for employee contributions up to the IRS maximum of $3,200 for your 2024 plan year. Flores plan documents will be updated automatically to reflect the change. No changes will be made to your plan maximum if you indicated you do not want an automatic adjustment on your 2024 re-enrollment checklist.


• For plans permitting a Health Care FSA or Limited FSA carryover, the maximum carryover amount for plan years beginning in 2024 is $640 (or 20% of the FSA statutory annual max), which is an increase of $30 from the carryover limit of $610 for plan years beginning in 2023.
• Monthly Commuter Benefit limits for parking and for transit will rise by $15 from $300 to $315 for tax year 2024.

Broker and Client Actions:

Charlotte, NC – November 9, 2023 – Today the IRS announced the Health Care FSA and qualified transportation contribution limits for plan years beginning on or after January 1, 2024 in Revenue Procedure 2023-34.

2024 Health Care FSA and Transportation Contribution Limits
The 2024 Health Care FSA employee contribution limit is $3,200 (up $150 from the 2023 FSA annual limit). The maximum Health Care FSA carryover is indexed each year to 20% of the annual IRS maximum employee contribution limit. Therefore, for plan years beginning in 2024, the carryover maximum is $640 (or 20% of the 2024 FSA annual maximum of $3,200), which is an increase of $30 from the 2023 carryover limit of $610. As set by the Internal Revenue Code, the Dependent Care FSA limits for 2024 remain $5,000 for married filing jointly or single and $2,500 for married filing separately. The 2024 transportation benefit contribution limit is $315 per month (up $15 from the 2023 limits).

For Flores Health Care FSA clients who currently allow the 2023 IRS maximum employee contribution of $3,050, Flores will automatically adjust your Health Care FSA plan to allow for employee contributions up to the 2024 IRS maximum of $3,200 for your 2024 plan year. Flores Cafeteria Plan documents will be updated automatically to reflect the change. No changes will be made to your Health Care FSA maximum if you indicated you do not want an automatic adjustment on your 2024 re-enrollment checklist.

Reminder Regarding 2024 Plan Maximums and Limits Previously Announced
The IRS also previously released the 2024 plan maximums and limits for health and welfare plans. Health Savings Account ("HSA") contribution maximums will increase in 2024 to $4,150 for self-only coverage and $8,300 for family coverage. In addition, the maximum out-of-pocket amounts will increase to $8,050 and $16,100 respectively and the minimum deductibles for HSA-qualifying health plans will increase to $1,600 and $3,200 respectively.
For employers subject to the ACA's Play-or-Pay mandate, the affordability safe harbor percentage applicable to 2024 plan years will be 8.39% (down from 9.12% in 2023). HHS out-of-pocket limits for ACA-compliant plans in 2024 will be $9,450 for self-only coverage and $18,900 for family coverage.

Read the IRS Release