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November 7, 2016

2017 Benefit Plan Limits (article)

In Revenue Procedure 2016-55, the IRS released 2017 inflationary or cost of living adjustments relating to several types of benefits, as follows (also see IRS News Release).

FSA Cap.  The amount that can be contributed to a health flexible spending account (FSA) through voluntary salary reductions for plan years beginning in 2017 will increase to $2,600, up from $2,550 in 2016.

Qualified Transportation Fringe BenefitsWith regard to transportation expenses reimbursed by an employer and excludable from the employee’s income under a qualified transportation program, the limits for 2017 remain unchanged from 2016:

 

2017

2016

Commuter Highway Vehicle (van pooling) and

Any Transit Pass

$255

$255

Qualified Parking

$255

$255

 

As a reminder, employees who use their bicycles for traveling between home and their place of employment are entitled to receive a reimbursement of up to $20 per month ($240 annually) for qualified bicycle expenses. This limit is not indexed nor tied to a cost of living adjustment.

Qualified Adoption Assistance Reimbursement Program (IRC §137)An employer-provided adoption assistance program that meets the qualifications of IRC §137, allows participants to recover expenses relating to adoption, such as reasonable adoption fees, court costs, attorney’s fees and traveling expenses.  Below are the exclusion limits and AGI phase-out limits for 2017 and 2016:

 

2017

2016

Exclusion Limit

$13,570

$13,460

AGI Phase-out Limits

Between $203,540 and $243,540

Between $201,920 and $241,920

Health Savings Accounts.  Please note that the 2017 annual limits applicable to health savings accounts were released earlier this year (see IRS Releases 2017 Health Savings Account Limits, Benefit Beat, 5/14/16).

Archer Medical Savings Accounts.  The Archer MSA pilot project ended on December 31, 2007; therefore, no new MSAs could be established after that date.  For existing MSAs, the annual deductible limits of a high deductible health plan used in conjunction with an Archer medical savings account for 2017 are slightly increased:

 

2017

2016

Single

Family

Single

Family

HDHP Annual Deductible

 

Between $2,250 and $3,350

Between $4,500 and $6,750

Between $2,250 and $3,350

Between $4,450 and $6,700

Out-of-Pocket Expenses

$4,500

$8,250

$4,450

$8,150

 

Long-Term Care Premiums.  The IRS limitations relating to eligible long-term care premiums includible as medical care, as defined by IRC §213(d) are:

Age at end of tax year

2017 Premium Limit

2016 Premium Limit

<40

$410

$390

>40 but <50

$770

$730

>50 but <60

$1,530

$1,460

>60 but <70

$4,090

$3,900

>70

$5,110

$4,870

 


The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.  
 

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