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Increased Health Savings: Flexible Spending Accounts Expanded

This act raises the contribution limits for health flexible spending accounts (FSAs) and allows unused funds to be carried over to the next year. This means citizens can save more money for medical expenses and won't lose unspent amounts at year-end, making health-related financial planning easier.
Key points
Annual contribution limit for health flexible spending accounts (FSAs) increases from $2,500 to $5,000, with an additional $500 for each dependent beyond two.
Unused FSA balances can now be carried forward to the succeeding year, preventing forfeiture.
These changes apply to tax years beginning after December 31, 2021.
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Additional Information
Responsible Additions and Increases To Sustain Employee Health Benefits Act of 2021
Print number: HR 1860
Sponsor: Rep. Stivers, Steve [R-OH-15]
Process start date: 2021-03-11