2023 Compliance Issues to Consider

Employee Benefits

2023 Compliance Issues to Consider

Prepare for 2023 with a high-level overview of key compliance issues that may impact your business. Topics include:

  • 2023 ACA Maximum Out-of-Pocket Expenses (non-grandfathered plans)
  • 2023 HSA & HDHP Design Maximums
  • FSA Limits
  • Dependent Care FSA Limits
  • Transportation Limits
  • Affordability Safe Harbors
  • Employer Shared Responsibility Tax
  • PCORI Fee
  • Selecting a Benchmark Plan
  • Wellness Incentive and Reward Limits
  • Transparency
  • No Surprises Act
  • Outbreak Period

The IRS recently released Revenue Procedure 2022-38, providing a list of inflationary adjustments made to employee health and welfare benefits (and other various items) for the 2023 calendar year. Included within that publication (among other items), were inflationary adjustments made to amounts employees may contribute to their health FSAs (applying to both general purpose and limited purpose health FSAs), and to qualified transportation fringe benefit reimbursement programs offered by employers to their employees on a non-taxable basis, which are described below. For informational purposes only, the maximum annual contribution amount an employee may make to a dependent care FSA (DCAP) has not increased, and continues to be $5,000 per calendar year in 2023.

  1. Health FSA (for both general purpose and limited purpose health FSAs):
    1. An employee may contribute a maximum of $3,050 to a health FSA for plan years beginning on or after January 1, 2023
    2. An employee may carryover a maximum amount of $610 from a plan that has a plan year beginning on or after January 1, 2023 to the following plan year
  1. Commuter Transit/Qualified Parking Benefit Limits
    1. An employee may receive up to $300 per month in reimbursements for qualified transportation expenses (e.g., commuter highway vehicle, transit passes)
    2. An employee may receive up to $300 per month in reimbursements for qualified parking expenses

These annual adjustments are permissive, meaning employers/plan sponsors need not adopt the above inflationary adjustments within their plan. If an employer/plan sponsor chooses to adjust their employee contribution/reimbursement amounts, they should ensure that the governing plan documentation accurately reflects the intended inflationary adjustments made to the plan.

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DISCLAIMER: Brown & Brown, Inc. and all its affiliates, do not provide legal, regulatory or tax guidance, or advice. If legal advice counsel or representation is needed, the services of a legal professional should be sought. The information in this document is intended to provide a general overview of the topics and services contained herein. Brown & Brown, Inc. and all its affiliates, make no representation or warranty as to the accuracy or completeness of the document and undertakes no obligation to update or revise the document based upon new information or future changes.