The Consolidated Appropriations Act (CAA), 2023 (Public Law 117-328), extended certain key virtual care flexibilities instituted during the COVID-19 public health emergency through December 31, 2024. This includes the telehealth safe harbor for health savings account-eligible high deductible health plans. Without congressional action, these waivers and flexibilities will end on December 31, 2024.
Read the latest update from McDermott+ for more information on these policies, relevant regulatory and congressional action, and the likelihood of further extensions before the end of this year.
On October 18, 2022, the Internal Revenue Service (IRS) announced cost-of-living adjustments to the applicable dollar limits for certain account-based health and welfare plans (see Rev. Proc. 2022-38). The maximum salary reduction limit for a health flexible spending account (Health FSA) increased to $3,050 for 2023 (from $2,850 in 2022), and the Health FSA carryover limit for plans that have adopted that feature increased to $610 for 2023 (from $570 in 2022). In addition to these increases, the monthly limit for contributions to a qualified transportation fringe benefit and qualified parking program increased to $300 for 2023 (from $280 in 2022). The IRS previously announced (see our article here) cost-of-living adjustments to the applicable dollar limits for health savings accounts (HSAs), high-deductible health plans (HDHPs) and excepted benefit health reimbursement arrangements (HRAs) for 2023 for which we also saw substantial increases.
The Social Security Administration also recently announced that the maximum amount of earnings subject to the Social Security tax will increase to $160,200 for 2023 (from $147,000), resulting in a larger chunk of income being subject to the Social Security tax.
The IRS has yet to announce the 2023 cost-of-living adjustments for retirement plans.
These announcements are timely, if not late, given that many employers are already in the middle of open enrollment for 2023. Plan sponsors should act quickly to update payroll and plan administration, along with open enrollment communications, to account for the changes. For further information about applying the new employee benefit plan limits for 2023, contact one of the authors or your regular McDermott lawyer.
A new IRS notice extends the deadline for individuals to make health savings account (HSA) contributions from April 15, 2020 to July 15, 2020. The IRS issued the notice to provide taxpayers with various tax filing and payment deadline extensions in response to the ongoing COVID-19 emergency.
In Depth
In response to the COVID-19 emergency, the IRS has issued Notice 2020-18, which extends certain tax filing and payment deadlines. All taxpayers with filing or payment deadlines of April 15, 2020 are eligible for relief under the Notice, regardless of whether they are directly impacted by COVID-19 (for example, due to illness or quarantine). The Notice extends the deadline for individuals to make contributions to their health savings accounts from April 15, 2020 to July 15, 2020.
HSAs allow individuals who are covered under high-deductible health plans (HDHPs) to contribute an amount up to IRS limits ($3,550 for individual coverage and $7,100 for family coverage in 2020), which is used to pay for certain eligible medical expenses on a pre-tax basis. HSA contributions are typically due by the federal income tax filing deadline of April 15. Because that deadline has now been extended to July 15, 2020, the IRS has also extended the deadline to make HSA contributions until the new filing deadline.
Earlier this month, the IRS allowed individuals covered by an HDHP to receive testing and care for COVID-19 without a deductible, or with a deductible below the HDHP minimum, without disqualifying the individual from making or receiving HSA contributions (see our previous On the Subject here).
A new IRS notice will allow many with chronic health conditions who participate in high-deductible health plans (HDHPs) with health savings accounts (HSAs) to receive necessary care that may otherwise be out of financial reach. The notice expands the list of preventive care benefits that can be covered by an HDHP prior to a participant meeting the minimum deductible without disqualifying them from making or receiving HSA contributions.
The Internal Revenue Service (IRS) recently announced cost-of-living adjustments to the applicable dollar limits for health savings accounts and high-deductible health plans for 2020. Nearly all of the dollar limits currently in effect for 2019 will change for 2020.
See a comparison of the applicable dollar limits for HSAs and HDHPs for 2019 and 2020.
On May 10, 2018, the IRS announced cost-of-living adjustments to the applicable dollar limits for health savings accounts and high-deductible health plans for 2019. Many of the limits will change for 2019.
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