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2021 Health FSA and Other Limits Announced

October 27, 2020

The limits for Health FSA, qualified transportation, and parking will not change from 2020 limits. However, the max annual reimbursement is increasing slightly.

Alert

At a Glance

The 2021 limits for:
- Health FSA, including a Limited Purpose Health FSA remains $2,750/yr
- Health FSA maximum carryover of unused amounts will be $550
- Qualified Transportation plans remains $270/mo
- Qualified Parking plans remains $270/mo
- Excepted Benefit HRA remains $1,800/yr
- Qualified Small Employer HRA (QSEHRA) increases to $5,300/yr for single coverage and $10,700/yr for family coverage

Increases to Some but not All

IRS Revenue Procedure 2020-45 provides details about the annual inflation adjustments for more than 60 tax provisions, including contribution limits for Health FSAs and reimbursement limits for Qualified Transportation fringe benefit plans and Qualified Small Employer HRAs (QSEHRAs). The limits for Health FSA, qualified transportation, and parking will not change from the 2020 limits. However, the maximum annual reimbursement limit under a QSEHRA is increasing slightly to $5,300yr/single and $10,700yr/family.

Additionally, Revenue Procedure 2020-43 provides the inflation-adjusted maximum dollar amount that may be made available for Excepted Benefit Health Reimbursement Arrangements (EBHRAs) in 2021.

Health FSA, Transportation, QSEHRA and EBHRA Plan Limits

2021 v. 2020

Benefit Plan	2021	2020	Change
Health FSA	$2,750/year	$2,750/year	No change
Qualified Commuter and Transit Benefits	$270/month	$270/month	No change
Qualified Parking	$270/month	$270/month	No change
Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)	$5,300/year for single coverage $10,700/year for family coverage	$5,250/year for single coverage $10,600/year for family coverage	+ $50 + $100
Excepted Benefit HRA (EBHRA)	$1,800/year	$1,800/year	No change