They made us wait a little longer than usual, but the 2019 FSA contribution limit has finally been announced! If you're a seasoned flex spending veteran, or considering one for your healthcare planning, knowing how much you can put into your account is pivotal for your annual budget.
Each year, the IRS sets the contribution limit for those with an FSA. This limit is subject to indexing based on the increase in Consumer Price Index for All Urban Consumers (CPI-U) each year.
In 2018, the limit for FSA contributions was $2,650, but the IRS has raised the limit for 2019 to$2,700. Check the chart below for all the information you'll need to make an informed decision for the coming year.
Yearly Contribution Limit
$2,700 per FSA (note that the limit remains the same regardless of single vs. family plan participation). If both spouses have an FSA through their respective employers, they could each elect the maximum in their own account for a total of $5,400 between the two accounts.
FSA plans are sponsored by employers and eligibility rules are set by each plan. If your employer offers an FSA and you meet the eligibility requirements they set, you're eligible to contribute. Self-employed individuals and owners of certain types of corporations are not eligible for an FSA.
An FSA is owned and set up by the employer.
Access to Money
An employee's yearly FSA election is available in full on the first day of the plan year, regardless of contributions to date. Funds can be accessed via a card if available of through submission of claims for reimbursement.
FSA users can only change their contributions during their Open Enrollment periods. Some plans also allow changes to contributions to be made if the account holder experiences a qualifying life event, such as marriage, divorce, or birth of child.
Special Rules/ Eligibility Exceptions
Employers can choose one of two (or none) options to provide relief for FSA users who would otherwise have to forfeit leftover funds: the $500 rollover and the 2.5 month grace period. The $500 rollover allows FSA users to move up to $500 of the previous plan year's contribution into next year's allocation (without counting against the overall contribution limit) to avoid forfeiting money at year end.
The second is the FSA Grace Period, which gives users up to 2.5 months after the last day of their plan year to spend down their remaining FSA funds.
For more information about what an FSA can cover, visit our comprehensive Eligibility List.