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2025 Health FSA and Other Limits Announced
October 23, 2024
At-A-Glance
The IRS released 2025 tax year limits for FSA, transportation and parking benefits, QSERHA reimbursement limits, and EBHRA limits.
2025 Plan Limit Increases
IRS Revenue Procedure 2024-40 provides details about the annual inflation adjustments for more than 60 tax provisions (including contribution limits for Health FSAs) and reimbursement limits for qualified transportation fringe benefit plans and qualified small employer health reimbursement arrangements (QSEHRAs). All plan limits addressed in the revenue procedure are increasing for 2025.
Additionally, Revenue Procedure 2024-25 states that the 2025 inflation-adjusted maximum dollar amount for excepted benefit health reimbursement arrangements (EBHRAs) will increase to $2,150 per year.
| Benefit Plan | 2025 | 2024 | Change |
| Health FSA | $3,300 per year | $3,200 per year | + $100 |
| Health FSA Carryover | $660 per year | $640 per year | + $20 |
| Qualified Commuter and Transit Benefits | $325 per month | $315 per month | + $10 |
| Qualified Parking | $325 per month | $315 per month | + $10 |
| Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) Payments and Reimbursements | $6,350 per year (single coverage) $12,800 per year (family coverage) | $6,150 per year for single coverage $12,450 per year for family coverage | + $200 + $350 |
| Excepted Benefit HRA (EBHRA) | $2,150 per year | $2,100 per year | + 50 |
Next Steps
With open enrollment season upon us, employers should ensure their open enrollment materials are accurate and communicate any updates to their employees. Employers with plans adopting the new limits but whose open enrollment periods have already ended may consider providing a limited special enrollment period to allow participants to adjust their selections.
Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change, and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney, or Advisor.
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