2021 Health and Fringe Benefit Limits

Kilpatrick Townsend

October 28, 2020 2021 Health and Fringe Benefit Limits

For calendar year 2021, the Health FSA contribution limit and the parking and transit limits remain the same. Other limits increase only slightly.

2021 Health and Fringe Benefit Plan Limits

2020

2021

Health Savings Accounts – HDHP Limits (§223(c)(2)(A))
HDHP Minimum Annual Deductible – Self

HDHP Minimum Annual Deductible – Family

HDHP Out-of-Pocket Maximum – Self Only

HDHP Out-of-Pocket Maximum – Family

$1,400

$2,800

$6,900

$13,800

$1,400

$2,800

$7,000

$14,000

Health Savings Accounts – Maximum Contribution Limits (§223(b))

Self Only

Family

Catch-Up Contributions (age 55 by the end of the year)

$3,550

$7,100

$1,000

$3,600

$7,200

$1,000

Out-of-Pocket Maximum – PHSA §2707(b) Limits Self Only

Embedded Individual Max within Family Coverage

Family

$8,150

$16,300

$8,550

$17,100

Transportation Fringe Benefits – Monthly Limits (§132(f)(2)) Parking

Transit Passes and Vanpooling (combined)

$270

Health FSA Contribution Limit (§125(i))

FSA Carryover Limit

$2,750

$550

$2,750

$550

Dependent Care FSA Contribution Limit (§129(a)(2))*

$5,000

Employer Adoption Assistance Exclusion (§137)

Maximum Gross Income Exclusion

Maximum AGI Limit (after which exclusion phases out)

$14,300

$214,520

$14,440

$216,660

Qualified Small Employer HRA – Maximum Annual Contribution Limits (§9831(d))

All Coverage (other than family)

Family Coverage

$5,250

$10,600

$5,300

$10,700

Dollar Amounts in Red Indicate an Increase for 2021.

* Special income tax situations may require a lower limit.

Social Security Tax and Wage Base

The Social Security Administration announced that the 2021 social security wage base will be $142,800, which is an increase of $5,100 from $137,700 for the 2020 calendar year.

Medicare Tax

The regular Medicare tax rate of 1.45% remains unchanged and applies to all income without a limitation for both the employee and employer portion. The Affordable Care Act additional Medicare tax of 0.9% remains unchanged. The additional Medicare tax applies to wages, other compensation, and self-employment income over certain dollar thresholds ($200,000 for single and $250,000 for married filing jointly). The additional Medicare tax only applies to the employee and not the employer. IRS regulations require an employer to withhold the additional Medicare tax on wages or compensation it pays to an employee in excess of $200,000 in a calendar year.