Employee Benefits Compliance

2020 Cost-of-Living Adjustments for Benefits FSA, Transportation Benefits, and More

On November 6, 2019, the Internal Revenue Service (IRS) released the 2020 Cost-Of-Living Adjustments (COLA) for Flexible Spending Accounts (FSA), including for Dependent Care Account Plans (DCAP). Additionally, Qualified Small Employer Health Reimbursement Arrangements (QSEHRA) and transportation fringe benefit plans will see changes in 2020. These changes will be effective January 1, 2020, as reflected below. Plan sponsors with these benefits should adjust their limits, where applicable, for their 2020 plan year.

Year FSA Transportation Fringe Benefit QSEHRA DCAP
2019 $2,700 $270 $5,150 / $10,450 $2,500 / $5,00
2020 $2,750 $265 $5,250 / $10.600 Unchanged

The 2020 COLA adjustments for Health Savings Accounts (HSA) and High Deductible Health Plans (HDHP) were previously released. See the Leavitt article.

For complete details, see:

IRS Revenue Procedure 2019-44 for 2020: https://www.irs.gov/pub/irs-drop/rp-19-44.pdf

News Release: https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2020

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