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Health and Welfare

2020 Welfare Benefit Plan Limits

Today, the IRS issued Revenue Procedure 2019-44 which provides the 2020 cost-of-living adjustments for inflation as provided by the Internal Revenue Code. For plan sponsors of welfare benefit and fringe benefit plans, the most applicable adjustments announced in Revenue Procedure 2019-44are listed in the following table:

Cafeteria Plan Limits and Thresholds
 
Health FSAs 2020 (new) 2019 (old)
Maximum Health FSA Salary Reductions $2,750 $2,700
     
Adoption Assistance 2020 (new) 2019 (old)
Maximum Exclusion for Employer-Provided Adoption Assistance
 
$14,300* $14,080
Adoption Tax Credit Limit
 
$14,300* $14,080
*The amount excludable from an employee’s gross income begins to phase out for taxpayers with modified adjusted gross income in excess of $214,520 and is completely phased out for taxpayers with modified adjusted gross income of $254,520 or more.
     
Consumer-Driven Health Care Limits and Thresholds
 
Archer MSAs 2020 (new) 2019 (old)
High Deductible Health Plan Deductible‒Single    
  Minimum $2,350 $2,350
  Maximum $3,550 $3,500
     
High Deductible Health Plan Deductible‒Family    
  Minimum $4,750 $4,650
  Maximum $7,100 $7,000
     
High Deductible Out-of-Pocket Maximum    
  Single $4,750 $4,650
  Family $8,650 $8,550
       
HSAs 2020 (new) 2019 (old)
HDHP Minimum Annual Deductible    
  Individual $1,400 $1,350
  Family $2,800 $2,700
       
HDHP Out-of-Pocket Maximum    
  Individual $6,900 $6,750
  Family $13,800 $13,500
       
HSA Maximum Contribution Limit    
  Individual $3,550 $3,500
  Family $7,100 $7,000
       
HSA Contribution Limit $1,000 $1,000
       
QSEHRAs 2020 (new) 2019 (old)
Maximum Reimbursement Allowed    
  Single $5,250 $5,150
  Family $10,600 $10,450
     
Fringe Benefit Limits and Thresholds
 
Adoption Assistance 2020 (new) 2019 (old)
Maximum Exclusion for Employer-Provided Adoption Assistance
 
$14,300* $14,080
Adoption Tax Credit Limit
 
$14,300* $14,080
*The amount excludable from an employee’s gross income begins to phase out for taxpayers with modified adjusted gross income in excess of $214,520 and is completely phased out for taxpayers with modified adjusted gross income of $254,520 or more.
     
Transportation Fringe Benefits 2020 (new) 2019 (old)
Parking $270/mo. $265/mo.
Transit Passes & Vanpooling (combined) $270/mo. $265/mo.
     

Open enrollment for many employers may have already passed, and employees may have elected benefits based on the 2019 limits due to the late announcement of these 2020 limits. Revenue Procedure 2019-44 does not contain any expressly stated relief to employees who have made their elections without knowing the new 2020 limits.

Be sure to check www.nbsbenefits.com/limits for the latest information on all limits related to retirement, health, and welfare benefit plans as well as consumer-driven health care.