Employees can contribute up to $2600 in pre-tax money into their health care flexible spending account (FSA) next year – an increase of $50 from 2016.
This news, released in the Revenue Procedure 2016-55 by the IRS on October 25th, is welcomed for employees who have their fair share of health expenses.
FSAs help cover out-of-pocket qualified medical expenses, including copays for doctor’s visits, prescriptions, and deductibles (to name just a few things).
With open enrollment currently upon us, employers should communicate this increase to their employees so they can update their FSA contributions accordingly before the deadline.
Why this Increase is Important