Mercer has projected 2020 limits for qualified transportation (parking and transit) benefits, health flexible spending arrangements (FSAs) and Archer medical savings accounts (MSAs). These unofficial 2020 limits are determined using the Internal Revenue Code’s cost-of-living adjustment methods, chained Consumer Price Index for All Urban Consumers (chained CPI) values through July and Mercer’s projected chained CPI for August. IRS is expected to announce the official 2020 limits for these benefits in October.

Limits for adoption assistance programs are also based on chained CPI for the 12-month period ending Aug. 31, 2019, but can’t be reliably estimated in advance due to the small rounding threshold. IRS usually announces these limits in October, along with long-term care limits (based on the medical component of chained CPI for August).

Qualified Transportation, Health FSA and Archer MSA Limits

Limits for qualified transportation fringe benefits and health FSAs are expected to increase slightly in 2020. Most Archer MSA limits are expected to increase, though the minimum annual deductible for self-only coverage is projected to remain the same, and the maximum out-of-pocket limit for family coverage is too close to call.

Related Resources

Non-Mercer Resource

• Chained Consumer Price Index for All Urban Consumers (Bureau of Labor Statistics)

Mercer Law & Policy Resource

• 2020 Affordable Percentage for Employer Health Coverage Shrinks (July 23, 2019)