As of January 1, 2013, the Affordable Care Act (ACA) placed a $2,500 cap on flexible spending account (FSA) contributions. A non-calendar year FSA plan will not be required to comply with the $2,500 limit until the first plan year beginning on or after January 1, 2013.
FSAs allow employees to use pre-tax dollars for “qualified medical expenses” like co-pays, deductibles, or prescription drugs. Previously, there was no limit on the amount an employee could place in an FSA, but any unused funds are lost at the end of the year. The purpose of the FSA cap is to fund the expensive changes elsewhere in the ACA.
The cap applies to married couples individually. In 2014, the cap will be adjusted for inflation.