Trey Tompkins No Comments

2022 Limits for Health FSAs, QSEHRAs and Transit and Parking Reimbursement Plans Confirmed By The IRS

This week the IRS confirmed cost-of-living increases for several employee benefit plan related limits. The agency announced the new limits in Revenue Procedure 2021-45. They were consistent with similar rates of increase in the Consumer Price Index over the past year.

The new limits announced this week apply to Health Flexible Spending Arrangements (Health FSAs) and Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs) with Plan Years beginning at any time during 2022. In addition, they apply to reimbursements paid by Transit and Parking Reimbursement Plans for expenses incurred during any month of 2022.

Health FSAs

Plans with 12 month Plan Years beginning in 2022 may allow employee salary reduction contributions up to $2,850 per year. This is an increase of $100 over the $2,750 limit applicable to Plan Years beginning in 2021.  Health FSAs with Plan Years consisting of less than 12 months must pro-rate the applicable limit.  

The new employee contribution limit also impacts the Health FSA rollover limit for Plan Years beginning during 2022.  In 2020, the IRS linked the maximum annual Health FSA rollover to 20% of the annual employee contribution limit.  Therefore, for Health FSAs beginning in 2022, $570 can be rolled over into the following Plan Year.  This is an increase of $20 over the originally announced $550 limit for Plan Years beginning in 2021. Note however that the $550 limit for Plan Years beginning in 2021 does not actually apply. Congress granted a temporary waiver of rollover limits for Health FSAs with Plan Years beginning in 2020 and 2021 in response to the COVID-19 pandemic.  

QSEHRAs

12 month Plan Years beginning in 2022 may reimburse participants with self-only coverage up to $5,450 per year.  The limit for participating employees with family coverage is $11,500 per year.  These amounts are increases against the 2021 limits of $5,300 and $10,700.  Similar to the rule for Health FSAs, Plan Years of less than 12 months must pro-rate the limits consistent with the length of the Plan Year.

Transit and Parking Reimbursement Plans

Plans may reimburse participating employees up to $280 per month for qualifying benefits. This is a $10 per month increase over the 2021 monthly limit of $270.  The $280 limit applies separately to monthly benefits provided for Transit / Van Pooling related expenses and Parking related expenses.  Therefore, employers could reimburse participants up to $560 per month if the employee incurs eligible Transit and Parking expenses.

Next Steps for Admin America Clients

Admin America will automatically adjust the applicable 2022 annual limits for clients previously utilizing the 2021 limits. Clients who wish to take advantage of these automatic adjustments do not need to take any action.  Clients utilizing the 2021 maximums who do not wish for Admin America to automatically adjust their 2022 limits should send an e-mail request to renewal@adminamerica.com.

Questions?

If you have any questions, please contact our FSA customer service. You can reach team via telephone at (678) 578-4641 or via e-mail at fsa@adminamerica.com.

Admin America No Comments

2020 Annual PCORI Tax Payment & Filing due August 2nd, 2021

This year, employers that cover their employees under a Health Reimbursement Arrangement (HRA) once again face an important deadline for payment of a tax along with filing a corresponding Federal Tax Form. Though you may no longer sponsor a current HRA, if you did sponsor an HRA plan year that ended in 2020, this tax is due this year.
 
You can access the updated letter for this year’s filings at: https://adminamerica.my.salesforce.com/sfc/p/3i000000DvXd/a/3i000000Y19H/4WGkqcUdL0xYf7rVRq7lg5foAh2g4rsIrAkn4HcBsPM.
 
If Admin America administered your 2020 HRA plan year, the PCORI Average Covered Lives Report is posted and available via your Employer Portal. You can access the employer portal directly via:
https://adminamericaemployer.lh1ondemand.com
 
If Admin America administered your 2020 HRA plan year, and the report is not available on your portal, please email enroll@adminamerica.com to request a copy of the report.
 
If your plan was self-administered, instruction on how to calculate your Average Number of Covered lives is contained in the letter.
 
Some things to Note:
 

  • Most employers that sponsor a Health Reimbursement Arrangement for their employees will be required to pay the PCORI Fee directly to the IRS on or before August 2, 2021. See the How: section of the letter for complete instructions and a copy of the form.
  • For covered group heath plans with Plan Years ending in 2020, the per life rate is either $2.54 or $2.66. See the How Much: section of the letter to determine which rate applies.
  • This year’s deadline is Friday August 2, 2021. The mailing address is on page 4 of the letter.
  • The named Plan Sponsor of the HRA must report and pay the PCORI Fee. For single employer HRA plans, the employer is the Plan Sponsor.

Admin America No Comments

2022 HDHP and HSA Limit Update

Each year in May the IRS releases the inflation adjusted limits for High Deductible Health Plans (HDHPs) and Health Savings Accounts (HSAs) applicable for the following calendar year.  The limits announced last month for 2022 in IRS Revenue Procedure 2021-25 are as follows: 

2022 HSA Annual Contribution Limits+ :

  • Self-Only Coverage: $3,650 (increased from $3,600 in 2021)
  • Family Coverage: $7,300 (increased from $7,200 in 2021)

+     Individuals age 55 or older as of the last day of 2022 may contribute an additional $1,000 to their HSA Account for that year (unchanged from 2021).

2022 HDHP Minimum Required Annual Deductibles:

  • Self-Only Coverage: $1,400 (unchanged from 2021)
  • Family Coverage: $2,800 (unchanged from 2021)

2021 HDHP Maximum Annual Out-of-Pocket Expense Limits:

  • Self-Only Coverage: $7,050 (increased from $7,000 in 2021)
  • Family Coverage: $14,100 (increased from $14,000 in 2021)


The IRS Revenue Procedure 2021-25 can be found online here.

If you have any questions about these changes or any other rules pertaining to Health Savings Accounts, please submit them to Admin America via our online Q&A forum.