FAQ regarding maximum limits on healthcare FSA and limited purpose FSA’s for 2017
Audience: State and Higher Education employees only. State refers only to employees on Central State payroll and excludes any offline agencies participating in the State Group Insurance program as well as any Local Education and/or Local Government employees.
Time period: Calendar year 2017
The IRS annually sets contribution limits for healthcare flexible spending accounts (FSA) and limited purpose FSAs (for dental and vision expenses only). The IRS typically releases these contribution limits for the following year in late October or early November. For 2016 the limits for healthcare FSA and L-FSA are $2,550 and that is the amount that state employees and higher education employees at Tennessee Board of Regents (TBR) colleges, schools, and universities and at the University of Tennessee can contribute. In late October the IRS announced that limits on healthcare FSA and L-FSA would increase by $50 to $2,600. Because the IRS had not released their 2017 limits at the time Open Enrollment started and ended, representatives of the state, TBR, and the University of Tennessee decided to keep our FSA and L-FSA limits at $2,550 for 2017. Employers may choose to have a lower limit than the IRS maximum, but cannot have a greater amount. We will likely increase the FSA and L-FSA maximum contribution amounts in fall 2017 for the 2018 plan year. Employees who have questions may contact their Agency Benefits Coordinator or PayFlex, the state’s contracted administrator for flexible benefits. This does not apply to offline agencies who participate in the state group insurance program or to Local Education or Local Government employees at all; your school system, city or county government, or other agency contracts on their own for flexible benefits and is not a part of the state’s flexible benefits program.