Insights

On Feb. 10, 2017, the IRS released an updated version of Publication 969 for use in preparing 2016 individual federal income tax returns. While there are no major changes to the 2016 version (as compared to the 2015 version), the publication provides a general overview of HSAs, HRAs and health FSAs, including brief descriptions of benefits, eligibility requirements, contribution limits and distribution issues.Minor changes include the updated 2016 limits for HSA contributions (the single-only contribution limit remained at $3,350, while the family contribution limit increased to $6,750) and the updated annual deductible and out-of-pocket maximums for HSA-qualifying HDHPs. While the deductible limit remains $1,300 for single-only coverage and $2,600 for family coverage, the out-of-pocket maximum limit increased to $6,550 for single-only coverage and $13,100 for family coverage. The publication also reminds employers that for plan years beginning in 2016, salary reduction contributions to a health FSA cannot be more than $2,550 per year. The publication serves as a helpful guide for employers with these types of consumer reimbursement arrangements.IRS Publication 969 »