Annually, the Internal Revenue Service and Social Security Administration release cost-of-living adjustments that apply to dollar limitations set forth in certain IRS Code Sections. The Consumer Price Index warranted increases in some benefits figures for 2023—for a full summary and charts of key 2023 figures that are of interest to employers and sponsors of benefit plans, please click here.
In addition, below is a summary of the recently released 2023 limits related to health flexible spending accounts (FSAs) and commuter benefits.
The annual contribution limit for health FSAs will increase to $3,050 in 2023. This is a $200 increase from the 2022 contribution limit. An increased FSA carryover for 2023 was also announced—if an employer’s plan permits the carryover of unused health FSA amounts, the maximum carryover amount rises to $610, up from $570.
Commuter (Parking and Transit)
The commuter benefits limit in 2023 for mass transit and parking will increase to $300 per month. This is an increase from the 2022 monthly limit, which was $280.
As always, please do not hesitate to reach out to our Employee Benefits team with any questions.