On November 10, 2021, the IRS released Revenue Procedure 2021-45, which contains the 2022 limits for health flexible spending accounts (FSAs) and commuter and parking benefits, among other limits.
The 2022 limits, as compared to the 2021 limits, are outlined below:
|Maximum Healthcare FSA Carryover||$570||$550|
|Dependent Care FSA||$5,000||$10,500*|
|Qualified Commuter/Parking Benefits||$280||$270|
|Adoption Assistance Tax Credit||$14,890||$14,440|
|Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)||$5,450 (single) / $11,050 (family)||$5,300 (single) / $10,070 (family)|
*For the 2021 taxable year only, Congress increased the maximum exclusion limit for employer-provided dependent care assistance programs from $5,000 to $10,500 ($5,250 for married individuals filing separately). The annual maximum exclusion limit for the 2022 taxable year will revert to the statutory maximum of $5,000 ($2,500 for married individuals filing separately). It is important to note that any unused amounts carried over from the 2021 plan year (if an employer adopted the special COVID-19 carryover provision) into 2022 do not count against an individuals’ 2022 $5,000 limit.
As a reminder, the 2022 limits for health saving accounts (HSAs) and high deductible health plans (HDHPs) were previously released this May in Revenue Procedure 2021-25. We reviewed the 2022 HSA limits in our prior blog post.
The HSA/HDHP 2022 limits, as compared to the 2021 limits, are outlined below:
|2022 (single/family)||2021 (single/family)|
|Annual HSA Contribution Limit||$3,650/$7,300||$3,600/$7,200|
|Maximum Annual HDHP Deductible||$1,400/$2,800||$1,400/$2,800|
|Maximum Out-of-Pocket for HDHP||$7,050/$14,100||$7,000/$14,000|
The 2022 Affordable Care Act (ACA) out-of-pocket maximums were also released earlier in the year by the Centers for Medicare and Medicaid Services (CMS) in the Notice of Benefit and Payment Parameters. The 2022 ACA out-of-pocket maximums, as compared to the 2021 limits, are outlined below:
|ACA Maximum Out-of-Pocket Limit||$8,700 (single)/|
Employer Action Items
- Employers should ensure their systems, documents, and enrollment materials are updated with the 2022 limits.
- Employers should notify their employees of the new 2022 limits.
- Revenue Procedure 2021-45 (Healthcare FSA/Commuter limits)
- Revenue Procedure 2021-25 (HSA/HDHP limits)
- Sequoia Foreword
Disclaimer: This content is intended for informational purposes only and should not be construed as legal, medical or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable. This information and any questions as to your specific circumstances should be reviewed with your respective legal counsel and/or tax advisor as we do not provide legal or tax advice. Please note that this information may be subject to change based on legislative changes. © 2021 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved