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If you’re in the thick of open enrollment season, take note. The IRS just released their annual inflation adjustments for a wide variety of tax provisions, including medical flexible spending accounts and commuter benefits accounts. These updates all came as part of Revenue Procedure 2022-38, released on October 18, 2022.

This comes on the heels of previously announced increases to health savings account limits.

What you need to know about 2023 contribution limits

• Employees can contribute $3,050 annually to a medical FSA
• Employees can contribute $3,850 annually to a health savings account individually, or $7,750 for a family
• If your FSA plan allows for carryover, employees can carry over $610 from 2022
• Employees can also contribute $300 monthly to a commuter account in in 2023

How do the 2023 limits compare to 2022?

The IRS increased contribution limits more than last year – double in fact! The chart below outlines the 2022 and 2023 limits, and the increase from year to year.

	2023	2022	∆
FSA Medical Annual Limit	$3,050	$2,850	+$200
Limited Purpose FSA Annual Limit	$3,050	$2,850	+$200
FSA Carryover Limit	$610	$570	+$40
HSA Annual Limit – Self-only	$3,850	$3,650	+$200
HSA Annual Limit - Family	$7,300	$7,750	+$450
Commuter Monthly Limit	$300	$280	+$20

The inflation adjustment announcement for FSAs comes earlier this year, which is hopefully welcome news that allows your team more time to build the new 2023 limits into your open enrollment platform and employee communications plan.