Many employee benefits are subject to annual dollar limits that are periodically updated for inflation by the Internal Revenue Service (IRS). The following commonly offered employee benefits are subject to inflation adjusted dollar limits:
-High deductible health plans (HDHPs) and health savings accounts (HSAs);
-Health flexible spending accounts (FSAs);
-401(k) plans; and
-Transportation fringe benefit plans.
The IRS typically announces the dollar limits that will apply for the next calendar year well in advance of the beginning of that year. This gives employers time to update their plan designs and make sure that their plan administration will be consistent with the new limits.
This Compliance Overview includes a chart of the inflation-adjusted limits for 2017. Although the majority of the dollar limits for 2016 will remain the same, a few key limits will change for 2017. To download the complete article including the chart, click HERE.