The IRS recently released their annual changes to flexible savings accounts (FSA) and 401(k)s. Below is a chart that compares the 2023 limitations to 2022 and 2021.
| Item | 2023 Limits | 2022 Limits | 2021 Limits | Comments |
| 401(k) Pretax Contribution Limit | $22,500 | $20,500 | $19,500 | Second increase after three years with no increase |
| 401(k) catch-up contribution limit | $7,500 | $6,500 | $6,500 | Annual catch-up deposits for individuals 50 and older |
| HSA contribution limit for individuals | $3,850 | $3,650 | $3,600 | Health Savings Account (HSA) contribution limit for individual coverage |
| HSA contribution limit for family coverage | $7,750 | $7,300 | $7,200 | Health Savings Account (HSA) contribution limit for family coverage |
| HDHP minimum deductible for individuals | $1,500 | $1,400 | $1,400 | High Deductible Health Plan (HDHP) minimal annual deductible for an individual |
| HDHP minimum deductible for individuals | $3,000 | $2,800 | $2,800 | High Deductible Health Plan (HDHP) minimal annual deductible for family |
| HDHP maximum out-of-pocket amounts for individuals | $7,500 | $7,050 | $7,000 | Annual individual limits for deductibles, copayments, and other amounts, not including premiums |
| HDHP maximum out-of-pocket amounts for family | $15,000 | $14,100 | $14,000 | Annual family limits for deductibles, copayments, and other amounts, not including premiums |
| FSA contribution limit | $3,050 | $2,850 | $2,750 | Annual maximum contribution to an employees’ flexible spending account |
| FSA carryover amount limit | $610 | $570 | $550 | Maximum amount of unused flexible spending account contribution that can be carried into the next year |
Although the increase in the limits have been significant, the increases are “still lower than the current inflation rate, which is 8.2%, according to the latest consumer price index.” (1)
Along with informing employees of the new limits, employers should encourage employees to participate in 401(k) and FSA savings vehicles for their financial security. Employee financial wellness improves employees’ health and productivity.
(1) https://hrexecutive.com/2023-fsa-limits-increase-in-response-to-rising-inflation/
(2) https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/2023-irs-contribution-limits-for-hsas-and-high-deductibel-health-plans.aspx
(3) https://www.irs.gov/newsroom/401k-limit-increases-to-22500-for-2023-ira-limit-rises-to-6500