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Compliance Resources

2025 Plan Limits

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.

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

Health Care Flexible Spending Account (FSA) maximum contribution limit

$3,300

Health Care Flexible Spending Account (FSA) maximum carryover amount

$660

Health Savings Account (HSA) maximum contribution limit*

* Includes both employee and employer contribution amount limits.

Self-only coverage

$4,300

Family Coverage

$8,550

Health Savings Account (HSA) catch-up contribution limit

$1,000

High-Deductible Health Plan (HDHP) minimum deductible

Self-only coverage

$1,650

Family coverage

$3,300

High-Deductible Health Plan (HDHP) out-of-pocket maximum amount*

* Including deductibles, copayments and other amounts, but excluding premiums.

Self-only coverage

$8,300

Family coverage

$16,600

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

Family coverage

$18,400

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

Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) maximum amount

Self-only coverage

$6,350

Family Coverage

$12,800

Commuter Benefit Limit

2025

Qualified transit and parking maximum monthly contribution limit[1]

$325

Adoption Assistance Program Limit

2025

Adoption assistance program[2] maximum contribution limit (including benefits provided for special needs children)

$17,280[3]

 

 [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.