Flexible Spending Accounts Program – New 2023 Limits For The HCFSA And LEX HCFSA (2024)

FAQs

Flexible Spending Accounts Program – New 2023 Limits For The HCFSA And LEX HCFSA? ›

HCFSA – In 2023, the maximum annual amount is $3,050 per employee, and the minimum is $100. If a spouse is also eligible for a FSA, they may also contribute separately up to the limit of $6,100 per household. LEX HCFSA – In 2023, the maximum annual amount is $3,050 per employee, and the minimum is $100.

For 2023, participants may contribute up to an annual maximum of $3,050 for a HCFSA or LEX HCFSA. The Dependent Care FSA (DCFSA) maximum annual contribution limit did not change for 2023. It remains at $5,000 per household or $2,500 if married, filing separately.

Revenue Procedure 2022-38, October 18, 2022, provides that for tax years be- ginning in 2023, the dollar limitation under section 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements is $3,050.

Though the Limited Expense Health Care FSA (LEX HCFSA) is similar to the HCFSA, it differs by the type of expenses it covers. The expenses are limited to qualifying dental and vision care services and products that meet the IRS definition of medical care.

For FSAs that permit the carryover of unused amounts, the maximum 2024 carryover amount to 2025 is $640. For unused amounts in 2023, the maximum amount that can be carried over to 2024 is $610.

FSAs only have one limit for individual and family health plan participation, but if you and your spouse are lucky enough to each be offered an FSA at work, you can each elect the maximum for a combined household set aside of $6,400.

While your Apple Watch, Garmin, or other tracker may offer you some insight—and maybe even some encouragement—to stay on top of your fitness routine, they are not typically considered medical devices for purposes of FSA and HSA funds.

For 2024, participants may contribute up to an annual maximum of $3,200 for a HCFSA or LEX HCFSA.

Facts about Flexible Spending Accounts (FSA)

You can use funds in your FSA to pay for certain medical and dental expenses for you, your spouse if you're married, and your dependents.

Is Hcfsa worth it? ›

An FSA can definitely be worth it, depending on your situation. This is especially true if your employer contributes money to your FSA as part of your overall compensation package. If you have eligible and qualifying expenses, an FSA can make sense as a way to pay for these expenses tax-free.

Limited Expense HCFSA (LEX HCFSA) (only for those enrolled in or covered by a High Deductible Health Plan with a Health Savings Account): − Reimburses only eligible dental and vision expenses incurred by you, your spouse, and your children through the calendar year they turn 26.

A Flexible Spending Account (FSA) is an employee benefit that allows you to set aside money, on a pre-tax basis, for certain health care and dependent care expenses. There are three types of FSA accounts: 1) Health Care FSA (HCFSA); 2) Limited Expense Health Care FSA (LEX HCFSA); and 3) Dependent Care FSA (DCFSA).

Healthcare FSAs Are Individual Accounts

Both you and your spouse can each have your own Healthcare FSA through your respective employers and both contribute the maximum amount to each account.

Health Care FSA - You can use your health care FSA to pay yourself back for eligible health care, vision, and dental expenses for yourself, your spouse, or eligible dependents (children, siblings, parents, and other dependents as defined in your plan documents).

No, you can only use this year's FSA funds to pay for an eligible expense incurred during this year, even if you have a payment plan going beyond this year.

The general limit on total employer and employee contributions for 2023 was $66,000 ($73,500 with catch-up).

You can only contribute a certain amount to your HSA each year, but all contributions roll over from year to year. In 2023, you can contribute up to $3,850 if you have health coverage just for yourself or $7,750 if you have coverage for your family. At age 55, individuals can contribute an additional $1,000.

The maximum contribution for family coverage is $8,300. Those age 55 and older can make an additional $1,000 catch-up contribution. Add those figures up and a couple could save as much as $10,300 in their HSAs, if they maxed out their accounts and were both at least age 55.