As the Open Enrollment season for 2021 benefits grows near, it’s time to make sure your company is ready for any changes from last year’s contributions. There have been changes to HSA, FSA and 401K limits for 2021. Any employer offering a high-deductible health plan (HDHP) will want to get up-to-date with these changes. You’ll want to communicate these changes to your employees early on so they can make sound decisions for the upcoming benefits year.
HSA Changes for 2021
In 2021, HSA contribution limits will see an increase of about 1.5% over 2020. For self-only, the limit goes from $3550 to $3600 — that’s a $50 increase. Add in family, and the limit goes from $7100 to $7200. That’s an increase of $100.
The $1000 limit for HSA catch-up contributions won’t change, so your 55+ employees will continue with the same parameters.
HDHP Changes for 2021
Employees may be basing their HSA contributions on their deductibles and out-of-pocket rates. While the HDHP minimum deductibles have not changed from 2021, the maximum out-of-pocket amounts have gone up. Now, a self-only maximum deductible will go up by $100, to $7000. Family maxes will go up by $200, to $14000.
FSA Changes for 2021
In 2021, the maximum amount of pre-tax employee contributions for FSAs will be $2750. In keeping with that increase, the carryover limit will also go up — a little. The carryover limit, which is the amount of contributions employees can take into the following year, is set at 20% of the maximum contribution amount.
The limit for FSA carryover in 2020 was $500. In 2021, the FSA carryover will be $550.
401K Changes for 2021
There’s been an increase in employee contribution limits for 401Ks in 2021. Most employees will see an increase of $500, making the limit $19,500. Catch-up contributions for 50+ employees will also go up $500, to $6500. The same goes for SIMPLE retirement accounts, up $500 to $13500.
Communicating Change to Employees
Are you looking for better ways to share these updates with employees before and during Open Enrollment? Learn more about designing a communication strategy for Open Enrollment at this post. Or, contact us to learn how we can help you build better benefits communication and administration with your teams.