The ACA imposes a maximum dollar limit on employees’ salary reduction contributions to a health FSA. Although the ACA set this limit at $2,500, it is indexed for cost-of-living adjustments each year. On Nov. 10, 2021, the IRS announced that, for taxable years beginning in 2022, the dollar limit on employees’ salary reduction contributions to a health FSA will increase to $2,850. This ACA Legal Update explains the indexed health FSA limit for 2022.
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