Correction on Medical Flex Spending Plan Election Amount

Due to new IRS guidelines*, there is a correction in the amount that employees can elect to deduct from their paycheck for medical flex spending. The new amounts are reflected below. 

Each employee may choose to deduct from his/her paycheck a maximum of $2,550 ($106.25/pay period) regardless of how many family members you have or whether your spouse is able to contribute at his/her place of employment. As in the past, you may submit claims for eligible expenses for you, your spouse and your eligible children. For those couples where both spouses work at Heartland AEA, each spouse may elect up to $2,550 for the plan year. 

Remember, if you enroll in medical flex spending and aren’t able to spend your entire election amount, you will be able to rollover up to $500 from the 2014-15 plan into the 2015-16 plan. IMPORTANT: Any balances $500 or under that are rolled over will be subject to the $2.50 administrative fee until account balance is $0. 

*New 2015 Limit for Health FSAs, Adoption and Transit 
The IRS and Social Security Administration released the 2015 cost-of-living (COLA) adjustments that apply to health flexible spending accounts (FSAs) in Revenue Procedure 2014-61. The new annual limit for health FSAs, including general-purpose and limited-purpose health FSAs, is $2,550 for plan years starting on or after January 1, 2015. 

The $2,550 limit is pro-rated for short plan years (plan years that are shorter than 12 months) and any carry-over amount from participants’ previous plan years may be added to the limit. For instance, participants may elect $2,550 for the 2015 plan year and carry over a maximum of $500 from the previous plan year, making their total account value $3,050 for the 2015 plan year. In other words, the $500 carryover does not count against or affect the $2,550 salary reduction limit. 

If you have any questions, contact Juliette Houseman, Benefits Specialist, at jhouseman@heartlandaea.org or ext. 14315.