FSAs, or flexible spending accounts, are being increasingly sought after for the cost-saving benefits allowed toward general medical expenses, such as doctor visits, over-the-counter drugs, and hospital beds, among others.
In fact, medical equipment distributor AvaCare Medical reported an estimated $30.7 billion was saved in FSAs in 2020—an increase of 8.7% over the prior year.
The Internal Revenue Service (IRS) revised the FSA contribution limits for 2023 with respect to the effects of inflation.
Now, employees can put an extra $200 into their healthcare flexible spending accounts (health FSAs), according to the IRS announcement in October. The annual contribution limit will rise to $3,050, up from $2,850 in 2022.
The increase is double the $100 rise from 2021 to 2022.
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