2020 Higher Limits for Health FSAs; HSAs; 401Ks; COLA

On November 6, 2019 the Internal Revenue Service announced that the inflation-adjusted contribution limit for medical flexible spending accounts, including limited purpose (FSAs), will go up by $50 to $2750 for plans starting on or after January 1, 2020. The contribution limit for dependent care FSAs (DCA) will remain the same for 2020, with an annual limit of $5000 per household or $2500 if married filing single.

Healthcare FSA

2017

2018

2019

2020

Salary Reduction Annual Limit

$2,600

$2,650

$2,700

$2,750

The Internal Revenue Service (IRS) and Social Security Administration have released the cost-of-living (COLA) adjustments that apply to dollar limitations set forth in certain IRS Code Sections. The Consumer Price Index rose and therefore warranted increases in most indexed figures for 2020.

Social Security and Medicare Wage Base

For 2020, the Social Security wage base is $137,700. The Social Security rate of 6.2% is applied to wages up to the maximum taxable amount for the year; the Medicare portion of 1.45% applies to all wages. In addition, individuals are liable for a 0.9 percent “Additional Medicare Tax” on all wages exceeding specific threshold amounts.

2017

2018

2019

2020

Social Security Wage Base

$127,200

$128,400

$132,900

$137,700

Employee Social Security Rate

6.2%

6.2%

6.2%

6.2%

Employee Medicare Rate

1.45%

1.45%

1.45%

1.45%

Total Employee Rate

7.65%

7.65%

7.65%

7.65%

Employer Matching Rate

7.65%

7.65%

7.65%

7.65%

Health Savings Account (HSA)

2017

2018

2019

2020

Minimum deductible amounts for the qualifying high-deductible health plan (HDHP)

Individual Coverage

$1,300

$1,350

$1,350

$1,400

Family Coverage

$2,600

$2,700

$2,700

$2,800

Maximum contribution levels

Individual Coverage

$3,400

$3,450

$3,500

$3,550

Family Coverage

$6,750

$6,900

$7,000

$7,100

Catch up allowed for those 55 and over

$1,000

$1,000

$1,000

$1,000

Maximums for HDHP out-of-pocket expenses

Individual Coverage

$6,550

$6,650

$6,750

$6,900

Family Coverage

$13,100

$13,300

$13,500

$13,800

401(k) Plans

2017

2018

2019

2020

Maximum Employee Deferral

$18,000

$18,500

$19,000

$19,500

Catch up allowed for those 50 and over

$6,000

$6,000

$6,000

$6,500

You can find the Revenue Procedures here.

Cost of Living Adjustment (COLA) information.