Inflation adjustments for benefit plan administration costs


(Photo: Diego M. Radzinschi / ALM Media)

As a result of recent announcements from the IRS and Social Security Administration, we now know most of the dollar amounts that employers will need to administer their benefit plans for 2022. Major dollar amounts for plans Retirement and Individual Retirement Accounts (IRA) are shown on the front of this 2022 limits card.

The back of the menu shows a number of dollar amounts that employers will need to know to administer Flexible Spending Accounts (FSA), Health Savings Accounts (HSA), and High Deductible Health Plans (HDHP), as well as health care providers who do not have acquired rights under the Affordable Care Act.

Some of the new numbers are significantly higher than their 2021 counterparts. For example, the Section 415 limit on annual additions to a participant’s account will increase from $ 58,000 to $ 61,000, and the annual clearing limit will increase. will increase from $ 290,000 to $ 305,000. The 401 (k), 403 (b) or 457 (b) annual carryover limit will be increased from $ 19,500 to $ 20,500. The annual catch-up contribution limit for the pension plan will remain at $ 6,500.

The annual pay threshold used to identify Highly Paid Employees (HCE) will increase from $ 130,000 to $ 135,000 for 2022.

Since the 2022 limit will only become relevant in 2023 – when employers ‘rethink’ their employee compensation in 2022 – employers should consider their employee compensation in 2021 when identifying HCEs for 2022 (as well as 5% of owners in 2021 or 2022).

The annual limit for IRA contributions (whether traditional or Roth) will remain the same at $ 6,000, including the annual limit for catch-up IRA contributions, which will remain at $ 1,000. Social Security’s taxable salary base (important for “integrated” Social Security pension plans) will drop from $ 142,800 to $ 147,000.

The maximum contribution to an HSA will increase slightly from $ 3,600 to $ 3,650 for individual coverage and from $ 7,200 to $ 7,300 for family coverage. The maximum HSA catch-up contribution will remain at $ 1,000.

The minimum deductible for any HDHP (which must accompany any HSA) will remain $ 1,400 for individual coverage and $ 2,800 for family coverage. For 2022, HDHP’s total annual reimbursable expense limit (deductibles, co-payments, and other amounts – but not premiums) will increase slightly to $ 7,050 for individual coverage and $ 14,100 for family coverage.

The maximum disbursement limits in 2022 for “essential health benefits” provided under all non-grandfathered health plans will increase from $ 8,550 to $ 8,700 for individual coverage, and from $ 17,100 to 17,400 $ for family coverage. Because the disbursement limits for essential health benefits are adjusted using the “premium adjustment percentage” calculated by the Department of Health and Social Services, and the HDHP maximum disbursements are adjusted based on the Based on the Consumer Price Index, it is not uncommon to see a larger shift in personal spending limits for essential health benefits.

The limit for employee deferrals to health care providers in 2022 will increase to $ 2,850. This limit only applies to salary reduction contributions within the framework of a health care FSA, and not to employer contributions. For this purpose, however, FSA employer contributions that could have been received in cash are treated as wage reduction contributions.

Nathalie Miller is a lawyer attorney at Spencer Fane srl in the company’s office in Overland Park, Kansas. She advises benefit plan providers, administrators and employers on ERISA and Tax Code matters that impact employer sponsored benefit plans. She proactively helps clients navigate the complex regulatory requirements governing employee benefit plans by engaging with a range of issues including day-to-day plan administration, plan governance and problem remediation. operational.


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