From the Hotline: Health FSA Maximums

Question: Does the IRS health flexible spending account (FSA) maximum apply to the entire family, or if both spouses are working, can they both benefit from each of their employer’s maximum contribution limit?

Answer: The maximum limit is to be applied per employee and per employer. Therefore both the employee and spouse can contribute the maximum. Note that this is specifically for health care flexible spending accounts (FSAs). According to the IRS, an employee may elect the maximum FSA amount for multiple employers as long as the employers are not a part of the same control group. The IRS states: “All employers that are treated as a single employer under § 414(b), (c), or (m), relating to controlled groups and affiliated service groups, are treated as a single employer for purposes of the maximum limit. If an employee participates in multiple cafeteria plans offering health FSAs maintained by members of a controlled group or affiliated service group, the employee’s total health FSA salary reduction contributions under all of the cafeteria plans are limited to the allocated maximum (as indexed for inflation) (§ 125(g)(4)). However, an employee employed by two or more employers that are not members of the same controlled group may elect up to the maximum limit (as indexed for inflation) under each employer’s health FSA.”

Resource: Internal Revenue Bulletin 2012-26