by Matt Gerard
on December 7, 2021
IRS Announces Some 2022 Cost-of-Living Adjustments for Welfare Benefit Plans
On November 10, 2021, the IRS issued Revenue Procedure 2021-45 which provides some of the 2022 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 2021-45 are listed in the following table:
| Cafeteria Plan Limits and Thresholds | ||||||
| Health FSAs | 2022 (new) | 2021 (old) | ||||
| Maximum Health FSA Salary Reductions | $2,850 | $2,750 | ||||
| Maximum carryover amount: | $570 | $550 | ||||
| Adoption Assistance | 2022 (new) | 2021 (old) | ||||
| Maximum Exclusion for Employer-Provided Adoption Assistance | $14,890* | $14,400 | ||||
| Adoption Tax Credit Limit | $14,890* | $14,400 | ||||
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*The amount excludable from an employee’s gross income begins to phase out for taxpayers with modified adjusted gross income in excess of $223,410 and is completely phased out for taxpayers with modified adjusted gross income of $263,410 or more. |
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| Consumer-Driven Health Care Limits and Thresholds | ||||||
| QSEHRAs | 2022 (new) | 2021 (old) | ||||
| Maximum Reimbursement Allowed | ||||||
| Single | $5,450 | $5,300 | ||||
| Family | $11,050 | $10,700 | ||||
| Fringe Benefit Limits and Thresholds | ||||||
| Adoption Assistance | 2022 (new) | 2021 (old) | ||||
| Maximum Exclusion for Employer-Provided Adoption Assistance | $14,890* | $14,440 | ||||
| Adoption Tax Credit Limit | $14,890* | $14,440 | ||||
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*The amount excludable from an employee’s gross income begins to phase out for taxpayers with modified adjusted gross income in excess of $223,410 and is completely phased out for taxpayers with modified adjusted gross income of $263,410 or more. |
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| Transportation Fringe Benefits | 2022 (new) | 2021 (old) | ||||
| Parking | $280/mo. | $270/mo. | ||||
| Transit Passes & Vanpooling (combined) | $280/mo. | $270/mo. | ||||
| Earlier this year, the IRS announced the following limits for the 2022 cost-of-living adjusted limits for Dependent Care Assistance Programs (DCAPs), health savings accounts (HSAs), and high-deductible health plans (HDHPs). Here are the details: | ||||||
| Cafeteria Plan Limits and Thresholds | ||||||
| DCAPs | 2022 (new) | 2021 (old) | ||||
| Unless Married Filing Separately: | $5,000 | $10,500 | ||||
| If Married Filing Separately: | $2,500 | $5,000 | ||||
| Consumer-Driven Health Care Limits and Thresholds | ||||||
| HSAs | 2022 (new) | 2021 (old) | ||||
| HDHP Minimum Annual Deductible | ||||||
| Individual | $1,400 | $1,400 | ||||
| Family | $2,800 | $2,800 | ||||
| HDHP Out-of-Pocket Maximum | ||||||
| Individual | $7,050 | $7,000 | ||||
| Family | $14,100 | $14,000 | ||||
| HSA Maximum Contribution Limit | ||||||
| Individual | $3,650 | $3,600 | ||||
| Family | $7,300 | $7,200 | ||||
| HSA Contribution Limit | $1,000 | $1,000 | ||||
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.
