Various annual inflation adjustments have been announced for 2020.
- Rev. Proc. 2019-44 provides annual inflation adjustments for more than 60 tax provisions for 2020, including those related to transportation fringe benefits, flex spending, and health insurance tax credit.
- Notice 2019-59 provides increased contribution limitations for pension plans and other retirement-related items for 2020.
- Rev. Proc. 2019-29 sets forth the annual inflation adjustment to the percentage of household income used to determine whether an employer’s offer of health care coverage under the Affordable Care Act (“ACA”) is affordable.
- The Department of Health and Human Services issued a final rule earlier this year setting the ACA’s 2020 premium adjustment percentage, which effects the maximum annual out-of-pocket limitation on cost sharing and the Pay or Play penalty amounts for 2020.
The chart below details some of these changes.
|
|
2020 |
2019 |
|
Transportation |
|
|
|---|---|---|
|
Monthly Limit for Qualified Transportation Fringe Benefit |
$270 |
$265 |
|
Monthly Limit for Qualified Parking |
$270 |
$265 |
|
Flex Spending |
|
|
|
Max Salary Reduction for Contributions to Health Flex Spending |
$2,750 |
$2,700 |
|
Health Insurance Expenses of Small Employers |
|
|
|
Dollar Amount to Determine Eligible Small Employers and to Limit the Credit (26 U.S.C. § 45R(d)(3)(B)) |
$27,600 |
$27,100 |
|
Retirement/Pension Plans |
|
|
|
Contribution Limit |
$19,500 |
$19,000 |
|
Catch-up Contribution Limit |
$6,500 |
$6,000 |
|
ACA – Affordability Rates |
|
|
|
% of Employee’s Household Income |
9.78% |
9.86% |
|
ACA – Out-of-Pocket Cost-Sharing Limits |
|
|
|
Self-only coverage |
$8,150 |
$7,900 |
|
Family coverage |
$16,300 |
$15,800 |
|
ACA - Penalty Amounts Under Employer Shared Responsibility Mandate (Pay or Play) |
|
|
|
Part A Penalty (employer fails to offer min essential coverage to at least 95% of full time employees and dependents) |
$2,570 |
$2,500 |
|
Part B Penalty (employer fails to offer coverage meeting min value requirements) |
$3,860 |
$3,750 |