2025 transportation and health FSA limits projected 

July 17, 2024

Mercer projects the 2025 limits for qualified transportation (parking and transit) benefits and health flexible spending arrangements (FSAs) will increase from 2024 levels. These unofficial 2025 limits are determined using the Internal Revenue Code (IRC)’s cost-of-living adjustment methods, the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) values through June and Mercer’s projected C-CPI-U for July and August. While adoption assistance program limits generally use the same indexing formula, they can’t be reliably projected due to the small rounding threshold. IRS usually announces the official limits for these benefits — along with long-term care limits (based on the medical component of the August C-CPI-U) — for the coming year in October or November.

Limits for qualified transportation fringe benefits and health FSAs are expected to rise moderately in 2025, due to the anticipated increase in average C-CPI-U for the year (estimated to be 2.7% to 3.1%). Although inflation has cooled off considerably from the record-breaking amounts in 2022 and 2023, 2024 is still on track to be noticeably higher than average. (Average annual inflation as measured for this purpose was 2.1% for 1999 through 2021.)

• C-CPI-U (Bureau of Labor Statistics)

• 2025 HSA, HDHP and excepted-benefit HRA figures set (May 10, 2024)
• Summary of 2024 benefit-related cost-of-living adjustments (Feb. 8, 2024)
• 2024 quick benefit facts (Jan. 17, 2024)
• Quick benefit facts and COLA resources for benefit plans (2020–2024)