F.S.A. Limits in 2022: You Could Be In a position to Carry Over Extra Cash


With annual open enrollment pending for many employers, workers should log into their accounts or check with their employer about how much money is available and decide whether to adjust their paychecks for the next year, Ms. Myers said .

“Employees need to know their balance,” she said.

Employers have generally stated that in the face of a difficult job market due to the pandemic over the next year, they are trying to contain increases in health insurance costs for workers.

The average employee contribution to an FSA in 2019 was just under $ 1,200, according to the Employee Benefit Research Institute, which also found that nearly half of the participants forfeited all or part of their contributions. The median loss was $ 157. However, since payroll deductions are pre-tax, employees shouldn’t worry too much about leaving relatively small balances, said Paul Fronstin, director of health research at the institute.

“It’s okay to lose a little money,” he said, “when you get a tax break.”

To see how much you can save in taxes with an FSA, you can try online calculators like the one at FSAstore.com, which sells FSA-eligible products.

However, there is a caveat with all of the temporary changes. Any increase in carryover amounts or deadlines is at the employer’s discretion – and not all have made changes. About two-thirds of Willis Towers Watson’s customers have changed carryover rules for this year (for amounts withheld from 2020), but less than half will do so for next year, Ms. Myers said.

A survey of 2,200 shoppers in early September found that many workers weren’t sure whether their employer had adopted any of the changes, said Rida Wong, president of Health-E-Commerce, which runs FSAstore.com. About a quarter said they had more balances on their accounts than they did at the time last year.

So pay close attention to the benefits information sent by your employer, Ms. Wong said. And if you’re still not sure if the rules for your FSA have changed, check with your human resources department, she said.