IRS Releases 2025 Limits:Healthcare FSACommuter BenefitsAdoption Assitance

The Internal Revenue Service (IRS) released Revenue Procedure 2024-40 on October 22, 2024, outlining cost-of-living adjustments for health care flexible spending accounts (FSA), commuter, and adoption assistance program benefits for the 2025 taxable year.

The table below details the 2025 maximum limit amounts for these benefits (along with other plan limits announced earlier in the year detailed here), compared to the current 2024 limits.

Employers are advised to:

Revise applicable plan communications (e.g., open enrollment materials and summary plan descriptions) for 2025 and
Coordinate with benefit administration and/or payroll vendors to ensure the relevant contribution limits are updated for January 1, 2025.

Health & Welfare Plan Limits		2025	2024	Change from 2024
Health Care Flexible Spending Account (FSA) maximum contribution limit		$3,300	$3,200	+$100
Health Care Flexible Spending Account (FSA) maximum carryover amount		$660	$640	+$20
Health Savings Account (HSA) maximum contribution limit* * Includes both employee and employer contribution amount limits.	Self-only coverage	$4,300	$4,150	+$150
	Family Coverage	$8,550	$8,300	+ $250
Health Savings Account (HSA) catch-up contribution limit		$1,000	$1,000	No change
High-Deductible Health Plan (HDHP) minimum deductible	Self-only coverage	$1,650	$1,600	+$50
High-Deductible Health Plan (HDHP) minimum deductible	Family coverage	$3,300	$3,200	+$100
High-Deductible Health Plan (HDHP) out-of-pocket maximum amount* * Including deductibles, copayments and other amounts, but excluding premiums.	Self-only coverage	$8,300	$8,050	+$250
	Family coverage	$16,600	$16,100	+$500
ACA Compliant Plans cost-sharing maximum limit* * The Affordable Care Act (ACA) requires health plans to place annual limits on participants’ cost-sharing for essential health benefits (EHBs).	Self-only coverage	$9,200	$9,450	-$250
	Family coverage	$18,400	$18,900	-$500
Excepted Benefit Health Reimbursement Arrangement (EBHRA) maximum amount *Employers offer EBHRAs to reimburse the cost of excepted benefits (such as limited-scope dental or vision coverage) as well as short-term, limited-duration insurance plan premiums.		$2,150	$2,100	+$50
Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) maximum amount	Self-only coverage	$6,350	$6,150	+$200
	Family Coverage	$12,800	$12,450	+$350

Commuter Benefit Limit		2025	2024	Change from 2024
Qualified transit and parking maximum monthly contribution limit^[1]		$325	$315	+$10

Adoption Assistance Program Limit		2025	2024	Change from 2024
Adoption assistance program^[2] maximum contribution limit (including benefits provided for special needs children)		$17,280^[3]	$16,810	+$470

Please reach out to your eBen account team with any questions or contact us directly here.

^{[1] Internal Revenue Code (Code) Section 132(f) permits employers to offer a qualified transportation benefit program to their employees on a tax-free basis through a compensation reduction agreement.}

^{[2] Under Code §137, amounts paid by an employer (subject to dollar limits and other requirements) for “qualified adoption expenses” incurred in connection with the adoption (or in certain cases, the attempted adoption) of a child are excludable from an employee’s gross income if furnished pursuant to an “adoption assistance program” of the employer.}

^{[3] For 2025, the amount excludable from an employee’s gross income begins to phase out under IRC Section 137(b)(2)(A) for taxpayers with modified adjusted gross income of more than $259,190 and is completely phased out for taxpayers with modified adjusted gross income of $299,190 or more.}

^{The contents of this article are for general informational purposes only and Risk Strategies Company | eBen makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.}

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