The Internal Revenue Service (IRS) released Revenue Procedure 2023-34 (Rev. Proc. 23-34), outlining key updates to health flexible spending account (FSA) contributions and carryovers for 2024.
Per Employee Limitation
For the 2024 plan year, employees can contribute a maximum of $3,200 in salary reductions. Family members benefiting from the FSA have individual limits, allowing a married couple with separate FSAs to each contribute up to $3,200, subject to employer-imposed limits.
Health FSA Rollover
Revenue Procedure 23-34 raises the maximum carryover amount to $640 for 2024. Employers can choose to set lower carryover limits. Unused funds exceeding the maximum are subject to the IRS’ use-or-lose rule and will be forfeited.
Partnering with Pierce Group Benefits
The IRS’s release of Revenue Procedure 2023-34 brings critical updates to health FSA contribution limits and carryovers for the 2024 plan year. Employers should take proactive steps to ensure compliance with the revised limits, communicate changes effectively, and provide employees with the necessary information to make informed decisions about their health FSA contributions. As the healthcare landscape continues to evolve, staying up to date of regulatory changes remains paramount for both. If you have questions about how these updates impact your health FSA plan, please reach out to your Pierce Group Benefits Account Executive or contact a PGB Representative at partnership@piercegroupbenefits.com.