FSA Store® sheds light on 2024 Internal Revenue Service contribution limits for flexible spending accounts and what consumers need to know
DALLAS, Nov. 10, 2023 /PRNewswire-PRWeb/ -- More than 35 million Americans who are enrolled in flexible spending accounts (FSAs) will be able to contribute more money to these tax-advantaged accounts in 2024, based on the newly announced contribution limit from the Internal Revenue Service. In light of the increase, Health-E Commerce®, parent brand to FSAstore.com® – the first and leading online store dedicated to exclusively selling FSA-eligible products – is educating account holders on the following little-known facts that will help them make the most of their FSA in the coming year.
An FSA is a tax-advantaged account that consumers can enroll in through their employer-sponsored benefits program. Employees can contribute to the account through pre-tax payroll contributions and any employer contributions are also tax favored. This reduces the employee's taxable income and helps them pay for a wide range of expenses. FSA-eligible expenses are determined by the Internal Revenue Service.
About the new limit: According to the IRS (https://www.irs.gov/pub/irs-drop/rp-23-34.pdf), the limit for FSA employee contributions will increase from $3,050 in 2023 to $3,200 in 2024. In addition to the contribution limit increase, the amount of unused FSA funds that an employer may allow employees to carry over from year to year will also increase. The carryover amount will increase from $610 in 2023 to $640 in 2024. The FSA carryover feature is optional for employers. Account holders should check with their benefits department to confirm if this option is available to them.
Five surprising facts about FSA contributions:
- The $3,200 limit for 2024 applies on a per FSA account basis. If an account holder switches jobs mid-year, they can elect to contribute the full amount at their new employer, regardless of the amount of claims they had incurred at their previous employer.
- There is only one FSA contribution limit that applies to both individuals and families. This differs from a health savings account (HSA) where there is a separate limit for health plan participation as an individual vs. two-person/family.
- If two spouses each have access to their own FSA through their respective employers, they could each elect the maximum of $3,200 for a combined household set-aside of $6,400.
- The FSA limit does not include the optional carryover amount. For example, if an employer offers a carryover of up to $610 in 2023, an account holder could have a balance of $3,810 in their FSA in 2024 ($3,200 2024 FSA max + $610 2023 FSA carryover).
- The FSA contribution limits apply only to pre-tax employee contributions. Employers may contribute to an employee's FSA in excess of the employee contribution maximum.
"By increasing the FSA contribution limits to keep pace with inflation, the Internal Revenue Service is enabling individuals and families to help protect their health, wellness, and financial wellbeing as prices continue to increase in all aspects of our lives," said Rachel Rouleau, chief compliance officer for Health-E Commerce. "By sharing these little-known facts about FSA contributions, we hope to educate consumers about the benefits of enrolling in an FSA and the potential for these accounts to help them save money and reduce their taxable income."
FSA Store offers a free, comprehensive eligibility list that makes it easy to map spending for the remainder of the year to ensure consumers don't leave any tax-free funds on the table due to a missed deadline. This list can be used to personalize the FSA experience so FSA users can shop for everyday healthcare needs by product, category, lifestyle, or health condition.
To learn more about FSAs, visit the FSA Learning Center at FSAstore.com.
Media contact: Barbara Tabor, [email protected], 651-230-9192
About Health-E Commerce
Health-E Commerce is the parent brand to FSA Store, HSA Store and WellDeservedHealth, a family of online stores that serve the 70+ million consumers enrolled in pre-tax health and wellness accounts. The company also created Caring Mill, a popular private-label line of health products that benefits Children's Health Fund and enables customers to make a donation with each purchase. Since 2010, the Health-E Commerce brands have led the direct-to-consumer e-commerce market for exclusively pre-tax health and wellness benefits. Health-E Commerce plays an essential role in expanding product eligibility for important new categories within the list of eligible medical expenses.
SOURCE Health-E Commerce