IRS Releases 2023
FSA Contribution Limit
Client Alert Applies To: Self-Funded, Fully-Funded, Large Group, and Small Group
The IRS recently released *Revenue Procedure 2022-38 (Rev. Proc. 2022-38), confirming that for plan years beginning on or after January 1, 2023, the health Flexible Spending Account (FSA) contribution limit will increase to $3,050. The adjustment for 2023 represents a $200 increase to the 2022 health FSA contribution limit of $2,850.
The original $2,500 contribution limit is adjusted annually based on a complex cost-of-living calculation tied to certain consumer price index increases. The high inflation levels in 2022 were sufficient to boost the health FSA salary-reduction contribution limit by $200, to a maximum of $3,050 for plan years beginning on or after January 1, 2023. The Rev. Proc. 2022-38 also increases the 2023 maximum carryover limit for the health FSA to $610 (up from 2022’s limit of $570).
© 2022 by Moreton & Company. This Client Alert is intended to alert recipients to recent legal developments. It does not constitute the rendering of legal advice or recommendations and is provided for your general information only. If you need legal advice upon which you can rely, you must seek an opinion from your attorney.