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IRS Releases 2019 Cost of Living Adjustments for Health FSAs, DCAPs, Transportation Benefits & Adoption Credits

The IRS released the 2019 cost of living adjustments for tax-related limits to salary reductions for a variety of benefits. These adjustments are summarized in the table below.

Benefit2018 Limit2019 Limit
Qualified Transportation Fringe Benefit $260/month $265/month (increased by $5)
Adoption Credit $13,840 $14,080 (increased by $240)
Health FSA $2,650 $2,700 (increased by $50)
Transit Passes and Vanpooling $255 $265 (increased by $10)

 

We have not yet received confirmation regarding DCAP Limits and if there will be an increase to that benefit which has remained at $5,000/$2,500 since 2014. 

To whom does this apply?
This cost of living adjustment applies to employers who offer Flexible Spending Accounts, transportation and adoption benefits.
 
What steps must employers take to comply?
Increasing the dollar limits to match the increased maximums is optional.
 
When do employers need to comply?
These rates are applicable to the 2019 tax year.

 

 

 

This content is being provided as an informational tool. It is believed to be accurate at the time of posting and is subject to change. It is recommended that plans consult with their own experts or counsel to review all applicable federal and state legal requirements that may apply to their group health plan. By providing this information, Meritain Health is not exercising discretionary authority or assuming a plan fiduciary role, nor is Meritain Health providing legal advice.