The Internal Revenue Service (IRS) recently released the 2021 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) received the only increase in this guidance, of $50 and $100 for self and family coverage, respectively.
These changes will be effective January 1, 2021, as reflected below. Plan sponsors with these benefits should adjust their limits, where applicable, for their 2021 plan year.
|Year||FSA||Transportation Fringe Benefit||QSEHRA||DCAP|
|2020||$2,750||$265||$5,250 / $10,600||$2,500 / $5,000|
The 2021 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 2020-45 for 2021: https://www.irs.gov/pub/irs-drop/rp-19-44.pdf
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