2025 Health & Welfare Plan Limits: Key Updates from Atria
As we approach the new year, Atria is here to guide employers through important updates to 2025 health and welfare plan limits. These adjustments, announced by the IRS and related agencies, reflect inflationary changes and ensure compliance with evolving standards. Below is a summary of the updated limits and thresholds for 2025, along with considerations for employers.
Health Care Flexible Spending Accounts (HCFSAs)
- 2025 Contribution Limit: $3,300 (up from $3,200 in 2024).
- Carryover Limit: $660 (up from $640 in 2024).
Dependent Care Flexible Spending Accounts (DCFSAs)
- Annual Limit: $5,000 (unchanged; statutory limit).
Health Savings Accounts (HSAs)
- 2025 Contribution Limits:
- Self-only: $4,300 (up from $4,150 in 2024).
- Family: $8,550 (up from $8,300 in 2024).
- Catch-Up Contribution (age 55+): $1,000 (unchanged).
Qualified High Deductible Health Plans (HDHPs)
- Minimum Deductibles:
- Self-only: $1,650 (up from $1,600 in 2024).
- Family: $3,300 (up from $3,200 in 2024).
- Out-of-Pocket Maximums:
- Self-only: $8,300 (up from $8,050 in 2024).
- Family: $16,600 (up from $16,100 in 2024).
Qualified Transportation Benefits
- Monthly Limits for Parking and Transit/Vanpooling: $325 (up from $300 in 2024).
Adoption Assistance Programs
- Maximum Exclusion: $17,280 (up from $15,950 in 2024).
- Phase-Out Income Threshold: Starts at $259,190; completely phased out at $299,190.
Excepted Benefit HRAs
- Annual Contribution Limit: $2,150 (up from $1,950 in 2024).
ACA Employer Shared Responsibility Penalties
Employers categorized as Applicable Large Employers (ALEs) under the Affordable Care Act (ACA) should note the revised penalty amounts:
- Section 4980H(a) Penalty: $241.67 per month/$2,900 annually per employee (down from $247.50 per month/$2,970 annually in 2024).
- Section 4980H(b) Penalty: $362.50 per month/$4,350 annually per employee (down from $371.67 per month/$4,460 annually in 2024).
- Affordability Safe Harbor: Increased to 9.02% (up from 8.39% in 2024).
What This Means for Employers
Employers offering these benefits must review their programs and ensure compliance with the new limits. These updates impact:
- Plan design and funding.
- Employee communication during open enrollment.
- System and vendor adjustments to reflect the new thresholds.
At Atria, we work closely with employers to simplify these transitions, ensuring your benefits programs remain competitive, compliant, and aligned with employee needs.
Partner with Atria
Navigating annual adjustments can be complex, but you don’t have to do it alone. Atria specializes in benefits consulting, helping businesses like yours manage updates seamlessly while maximizing the value of your offerings.
Contact us today to learn how we can support your 2025 benefits planning.
About Atria
Atria merges world-class consulting and brokerage capabilities with a community-focused approach. We specialize in employee health and welfare plans, compliance, and strategic benefits planning, empowering businesses to succeed.