Many employee benefits are subject to annual dollar limits that are adjusted for inflation by the IRS each year. The IRS typically announces the limits that will apply for the next calendar year before the beginning of that year, giving employers time to update their plan designs and ensure their plan administration is compliant.
The following commonly offered employee benefits are subject to these limits:
- High deductible health plans (HDHPs) and health savings accounts (HSAs)
- Health flexible spending accounts (FSAs)
- Transportation fringe benefit plans
To help your organization stay compliant, we’ve outlined the updated limits for 2025. Employers should review these changes and update their plans accordingly.
Health Savings Account (HSA) Contribution Limit
A health savings account allows participants to save and pay for qualified medical expenses with tax-free dollars. However, there are limits to participants’ contributions, and exceeding these limits can result in tax penalties. HSA participants’ contribution limits will vary depending on whether they are enrolled in self-only or family coverage and if they are 55 years of age or older.
2025 HSA Contribution Limits
| Individual & Self-Only Coverage | $4,300 |
| Family Coverage | $8,550 |
High Deductible Health Plan (HDHP) Annual Deductible
The annual deductible for a high-deductible health plan (HDHP) is the amount HDHP participants must pay out of pocket for medical expenses before insurance begins to cover costs.
2025 HDHP Annual Deductibles
| Individual & Self-Only Coverage | $1,650 |
| Family Coverage | $3,300 |
High Deductible Health Plan (HDHP) Out-of-Pocket Maximum
The out-of-pocket maximum for a high deductible health plan (HDHP) is the maximum amount HDHP participants will have to pay out of pocket for covered medical expenses in a year.
2025 HDHP Out-of-Pocket Maximums
| Individual & Self-Only Coverage | $8,300 |
| Family Coverage | $16,600 |
Health Flexible Spending Account (FSA)
A health flexible spending account (FSA) is a tax-advantaged account that allows participants to allocate pre-tax funds to cover certain health care expenses. Health FSAs typically cover a variety of out-of-pocket medical expenses, including:
- Insurance copayments and deductibles
- Qualified prescription drugs
- Medical devices
- Dental cleanings
- And more
2025 Health FSA Limits
| Limit on Employees’ Pre-Tax Contributions | $3,300 |
| Carryover Limit | $660 |
Dependent Care Flexible Spending Account (FSA)
Similar to a health FSA, a dependent care FSA is a tax-advantaged account that allows participants to allocate pre-tax funds to cover eligible dependent care expenses, such as:
- Childcare facility fees
- Before- or after-school care
- Preschool
- And more
The dependent care FSA tax exclusion for 2025 is $5,000; $2,500 if married and filing taxes separately.
Transportation Fringe Benefits
Transportation fringe benefits cover transportation expenses that are reimbursed by an employer and are therefore excludable from the employee’s income under a qualified transportation program. The limits for transportation fringe benefits for 2025 are as follows:
2025 Transportation Fringe Benefits
| Transit Pass & Vanpooling | $325 |
| Parking | $325 |
Maintain Compliance in 2025 With CBIZ
The year ahead is sure to be filled with many regulatory and legislative changes as the country adapts to a new administration and what may follow. Ensure your organization is prepared to maintain compliance throughout 2025 — connect with our team of regulatory specialists at CBIZ today.
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