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IRS Bumps Up Health FSA Contribution Maximum

10/27/17

  07:25:00 pm, by MedBen5   , 214 words,  
Categories: News, Consumer-driven Health Plans, Flexible spending accounts (FSAs)

IRS Bumps Up Health FSA Contribution Maximum

IRS building

The Internal Revenue Service (IRS) has announced the annual inflation adjustment for flexible spending accounts (FSAs) for the 2018 tax year. As has been the case in previous years, contribution limits will see only modest increases or remain unchanged.

The 2018 dollar limitation on voluntary employee salary reductions for contributions to health FSAs is $2,650, up slightly from the current $2,600 maximum. Funds from these accounts can be used to pay for qualified medical expenses, including (but not limited to): deductibles, copays, and coinsurance; insulin, bandages, and other pharmacy items; eye exams and vision expenses; and dental and orthodontic expenses. Health FSA funds can also be used to pay for common over-the counter medications (i.e., aspirin, ibuprofen, and cough syrup), but only if accompanied by a doctor's prescription.

The dependent care FSA maximum annual contribution will hold steady at $5,000 in 2018. These accounts reimburse the employee for employment-related dependent care while the plan participant and spouse work (or look for work), such as payments to a day care center or baby-sitter, or expenses to care for a disabled spouse or other tax dependent.

MedBen clients who would like to increase their Health FSA employee maximum to $2,650, or who have any questions regarding FSA contributions, are welcome to contact Director of Administrative Services Sharon A. Mills at (800) 423-3151, Ext. 438 or smills@medben.com.

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