It’s that time of year again! As we round the corner into the holidays, soon to be watching the ball drop as we count down a goodbye to 2023, you’re likely finalizing renewal and enrollment decisions for your upcoming 2024 plan year. There’s a lot to keep track of when it comes to what will happen next, but luckily for you we’ve got a helpful breakdown of information to shed some light on what will happen at the end of 2023, and what 2024’s plan limits will look like.
End of Plan Year Options – Explained!
At the close of any given plan year, something must be done with the funds that may have been unspent by your still-active employees. Below, we’ve got a breakdown of each option and what they mean:
Rollover: this option will allow for any active employee’s unspent Medical FSA or Limited FSA balance to carry from one plan year into the next, up to the allowable limit for that year. At the end of 2023, up to $610.00 can be carried into the 2024 plan year for ongoing usage. Employees should take into consideration the amount that may carry over when electing their contributions for the upcoming plan year, to ensure that their total available can reasonably be spent in order to avoid unnecessary forfeiture. (Dependent Care plans do not allow for the Rollover option.)
Grace Period: this is a timeframe following the end of the plan year, during which employees are able to continue incurring new expenses against their ended plan year’s balance for Medical FSA, Limited FSA, or Dependent Care. The Grace Period cannot be used in conjunction with the Rollover within the same plan.
Runout: this is the timeframe following the end of the plan year, during which employees are able to file claims for services incurred within the allowable service period (whether through plan year end, or through the Grace Period if applicable). The Runout may be used in conjunction with the Rollover or the Grace Period, or may be offered on its own.
2024 Plan Limits – Revealed!
On 11/09/2023, the IRS released the new limits allowed for 2024 plans. Please see the table below for a comparison of this year’s limits vs. what can be allowed in 2024:
| Welfare Plan Limits | ||
| 2024 | 2023 | |
| Medical FSA / Limited FSA Max Contribution | $3,200 | $3,050 |
| Health FSA Max Carryover | $640 | $610 |
| Dependent Care FSA Max (Unchanged) | $5,000 | $5,000 |
| Individual HSA Max Contribution | $4,150 | $3,850 |
| Family HSA Max Contribution | $8,300 | $7,750 |
| HSA Catch-Up Contribution (Unchanged) | $1,000 | $1,000 |
| Mass Transit Monthly Max Contribution | $315 | $300 |
| Parking Monthly Max Contribution | $315 | $300 |
| Individual QSEHRA Max Reimbursement | $6,150 | $5,850 |
| Family QSEHRA Max Reimbursement | $12,450 | $11,800 |
Keep in mind that these are allowable maximums, and your plan may allow for any amount up to (or lower than) those listed above.
Questions? Let us help!
We’ve got a team of experts who are happy to help with any questions you may have on all of this, and so much more! Do not hesitate to reach out to PS Administrators for support and guidance as we ring in a new plan year together!