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(January 01, 2018)
NEW YORK, Jan. 1, 2018 /PRNewswire-iReach/ -- FSA administration company, Clarity Benefit Solutions discusses 2018 inflation-adjusted benefits caps and health FSAs.
IRS Revenue Procedure 2017-58 has been released, which includes several inflation adjustments to benefits such as Flexible Savings Accounts (FSAs) as well as additional items for the upcoming year—including the following for consumer-driven accounts:
- FSAs' maximum salary reduction will increase to $2,650. In 2017 it was $2,600. Employees can deposit an extra $50 in their FSAs! This new limit applies to employees' pretax salary contributions to both full- and limited-purpose FSAs.
- Commuter benefits plans' maximum monthly contribution for mass transit and parking will increase to $260—up from $255 in 2017.
- Qualified Small Employer Health Reimbursement Arrangements' (QSEHRA) maximum reimbursable limit will increase to $5,050 for single coverage. This is up from $4,950 in 2017. The maximum reimbursement limit for family coverage will be $10,250—up from $10,000 in 2017.
- Adoption Assistance Tax Credit's maximum amount that can be excluded from an employee's gross income—for the amounts paid or expenses incurred by an employer for qualified adoption expenses furnished pursuant to an adoption assistance program for other adoptions by the employee—is $13,840 in 2018. This marks an increase in $270 from 2017. The amount that is excludable from an employee's gross income begins to phase out for taxpayers with modified adjusted gross income of more than $207,580; and is completely phased out for taxpayers with modified adjusted gross income of $247,580 or more.
- Small employers' health insurance tax credit average annual wage limit is also increasing. The maximum average annual wages of employees used to gauge who qualifies as an eligible small employer is $53,400 in 2018. The 2017 threshold was $1,000 less. The average annual wage level at which the tax credit will start to phase out is $26,700. This is a $500 increase from 2017.
Employers should clearly communicate these higher caps to their employees during open enrollment, and have experts on hand to answer any questions. Provide the new information in a multitude of formats—such as print, website, and webinars.
About Clarity Benefit Solutions: Clarity Benefit Solutions provides technology that makes the health insurance plan selection process fast, easy, and straightforward. For over two decades, we have provided clients with industry-leading technology, compliance, and exceptional customer service. Our offering is designed to save time and lower the costs of managing benefits while also promoting employee self-service and automated ACA compliance.
Media Contact: Calvin Clark, Clarity Benefit Solutions, 732-428-8272, [email protected]
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SOURCE Clarity Benefit Solutions
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