Smart Benefits: Plan Ahead for 2020 with Update Contribution & Benefit Limits

Smart Benefits: Plan Ahead for 2020 with Update Contribution & Benefit Limits

The IRS has announced contribution and benefit limits for 2020.

Flexible Spending Accounts (FSA)

The 2020 contribution limits for FSAs are as follows:

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• For Healthcare FSAs, the contribution limit will increase to $2,750.
• For Commuter FSAs, the contribution limit will increase to $270 a year for the qualified transportation fringe benefit.

 

Health Savings Accounts (HSA)

The cost-of-living adjusted limits for HSAs and HDHPs are:

• Minimum deductible amounts for the qualifying high-deductible health plan (HDHP):
• Individual Coverage $1,400
• Family Coverage $2,800
• Maximum contribution levels:
• Individual Coverage $3,550
• Family Coverage $7,100
• Catch-up contribution allowed for those 55 and over is $1,000
• Maximums for HDHP out-of-pocket expenses:
• Individual Coverage $6,900
• Family Coverage $13,800

 

Qualified Small Employer Health Reimbursement Accounts (QSEHRA)

The 2020 contribution limit for QSEHRA will increase to $5,250 per self-only employee, up $100 from 2019, and to $10,600 per employee with a family, up $150 from 2019.

Retirement Accounts

The 2020 retirement contribution limits are as follows:

• The employee contribution limit for 401(k) plans will be $19,500, up from $19,000.
• The catch-up contribution limit for employees aged 50 and over will be $6,500, increased from $6,000.
• The employee contribution limit for IRAs will remain at $6,000.
• The catch-up contribution limit for employees aged 50 and over is not subject to an annual cost-of-living adjustment so it remains unchanged, at $1,000.
• The employee contribution limit for SIMPLE IRAs and SIMPLE 401(k) plans will increase to $13,500, up from $13,000. (“SIMPLE” stands for savings incentive match plan for employees.)
• The catch-up limit remains unchanged at $3,000.

 

Rob Calise is the Managing Director, Employee Benefits of The Hilb Group of New England, where he helps clients control the costs of employee benefits by focusing on consumer-driven strategies and on how to best utilize the tax savings tools the government provides. Rob serves as Chairman of the Board of United Benefit Advisors, and is a board member of the Blue Cross & Blue Shield of RI Broker Advisory Board, United HealthCare of New England Broker Advisory Board and Rhode Island Business Healthcare Advisors Council. He is also a member of the National Association of Health Underwriters (NAHU), American Health Insurance Association (AHIA) and the Employers Council on Flexible Compensation (ECFC), as well as various human resource associations. Rob is a graduate of Bryant University with a BS in Finance