IRS Announces Increases to Health Care FSA Limit and Qualified Transportation Expense Account Monthly Limitations for 2020

November 6, 2019 - the Internal Revenue Service issued 2019-44. This ruling increased the Health Care FSA Limit to $2,750, an increase of $50 over the 2019 limit of $2,700, for plan years beginning on or after January 1, 2020. The monthly limit on the value of the qualified transportation benefits exclusion for qualified parking provided by an employer to its employees for 2020 increased to $270, from the $265 limit in 2019. The monthly limit for transportation in a commuter highway vehicle and transit pass provided by an employer to its employees also increased to $270 for 2020, an increase of $5 from the 2019 limit of $265.

What you need to know:

• For Flores Health Care FSA clients currently allowing the IRS maximum of $2,700, Flores will automatically adjust your Health Care FSA to allow for enrollment up to the IRS maximum for 2020 of $2,750. You may communicate the new levels to your employees. When you send Flores enrollment data, your account will be ready to accept the $2,750 limit. Flores plan documents will be updated automatically to reflect the change.


• If an employer has elected the $500 Health Care FSA rollover option, rollover amounts will not apply to the $2,750 limit (i.e. employees with rollover amounts from a previous plan year may elect to contribute up to $2,750 in additional pre-tax payroll contributions for 2020).


• Monthly CBA limits for parking and for transit will rise by $5 from $265 to $270 for tax year 2020.

Please contact your business development partner at 800.532.3327 with questions regarding the increase.