Blog 10/29/2020

Plan Limits for 2021

For 2021:

Health & Welfare Plans

  • Employees can again put up to $2,750 into their health care flexible spending accounts. The maximum carryover amount for 2021 is $550, an increase of $50 from 2020.
  • The monthly exclusion amount for transportation in a commuter highway vehicle and any transit pass is $270.
  • The amount that can be excluded from an employee’s gross income for the adoption of a child with special needs is $14,440.
  • A high deductible health plan is defined as one that, for self-only coverage, has an annual deductible that is not less than $2,400 and not more than $3,600, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,800. For family coverage, the plan must have an annual deductible that is not less than $4,800 and not more than $7,150, and under its annual out-of-pocket expenses for covered benefits do not exceed $8,750 (applicable to Medical Savings Accounts, not to group health plans)

As announced earlier this year in Revenue Procedure 2020-32, the minimum deductible and maximum out-of-pocket expenses for the HDHPs are:

 

Limits
for High-Deductible Health Plans
2020 2021 Change
HDHP minimum deductibles Self-only: $1,400
Family: $2,800
Self-only: $1,400
Family: $2,800
No change
No change
HDHP maximum out-of-pocket amounts (deductibles, co-payments and other amounts, but not premiums) Self-only: $6,900
Family: $13,800
Self-only: $7,000
Family: $14,000
Self-only: +$100
Family: +$200


Retirement Plans

  • The annual additions limit to Savings plans has increased $1,000, to $58,000.
  • Compensation considered for Savings plan has increased to $290,000, from $285,000.
  • The Social Security Wage Base has risen to $142,800 from $137,700

Other limits (such as catch-up contributions, etc.) remain unchanged.

For details, see: https://www.irs.gov/pub/irs-drop/n-20-79.pdf and https://www.irs.gov/pub/irs-drop/rp-20-45.pdf.

 

2020 Consumer Report: The Health Care Literacy Gap Why Personalized Benefits Education is the Key to Cost Saving
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2020 Consumer Report: The Health Care Literacy Gap Why Personalized Benefits Education is the Key to Cost Saving
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