The IRS has announced 2027 cost-of-living adjustments for health flexible spending accounts (FSAs) and other employee benefits. The maximum voluntary employee salary reduction contribution to a health FSA will rise by $100 to $3,500, matching the increases for 2025 and 2026. For plans that allow unused funds to carry over, the maximum will increase by $20 to $700 (see table).
Health FSA maximums also apply to limited-purpose FSAs, which cover eligible dental and vision expenses and can be used alongside a health savings account (HSA).
Maximum reimbursements from a qualified small employer* health reimbursement arrangement (QSEHRA) will also increase, as will monthly tax exclusion limits for qualified transportation benefits.
MedBen clients with questions regarding these adjustments are welcome to contact Director of Administration Sharon A. Mills at (800) 423-3151, Ext. 438 or smills@medben.com.
* A “small employer” is defined as having fewer than 50 full-time employees.