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2019 Contribution Limits for Flexible Spending Accounts

limits

The Internal Revenue Service raised the annual contribution limit for Flexible Spending Accounts for 2019 to $2,700, $50 over the 2018 limit. This is the annual employee pre-tax maximum contribution allowed under the Health Care Flexible Spending Account and Limited Expense Health Flexible Spending Account available to federal employees.

HCFSA

This pre-tax benefit account is used to pay for eligible medical, dental, and vision care expenses not covered by your health care plan. With this account, you use pre-tax dollars to pay for qualified health care expenses.

The money you contribute to an HCFSA isn’t subject to payroll taxes, so you end up paying less in taxes and have more take-home money. You decide how much to contribute to your HCFSA based on what you plan to spend in the upcoming year on out of pocket health care expenses. Since the money in your HCFSA isn’t subject to payroll taxes, you typically save an average of 30% on your eligible health care expenses.

Note: You cannot use an HCFSA to pay for health or life insurance, long-term care insurance or any other insurance premiums, or cost of temporary continuation of coverage.

LEX HCFSA

This is an option if you’re enrolled in a Federal Employee Health Benefits high deductible health plan (HDHP) and have an HSA. This option is also available is your spouse is enrolled in a non-FEHB HDHP and an HSA.

IRS rules do not allow you to contribute to an HSA is you are covered by any non-qualifying health plan, such as a general purpose HCFSA.

You and your spouse remain eligible to participate in both a LEXHCFSA and an FSA by limiting FSA reimbursements to qualifying dental and vision care expenses. Participating in both plans allows you to maximize your savings and tax benefits. The money you contribute to a LEX HCFSA isn’t subject to payroll taxes, so you take home more.

Open Season is currently underway until December 10. More information can be found at fsafeds.com.