On October 22, the IRS announced more benefit limits for 2025, opening up new ways for employees and employers to optimize tax savings. With higher caps on health savings, transportation perks, and more, these changes are designed to help employees keep more of their income. Whether you’re saving for healthcare expenses, commuting costs, or family-related tax breaks, there’s something new in 2025 that could benefit you. Here are the highlights:

1. Flexible Spending Accounts (FSAs): Employees can now contribute up to $3,300 annually to healthcare FSAs. For plans that allow carryovers, the maximum carryover limit has risen to $660, offering more flexibility and savings potential for employees.
2. Commuter Parking and Mass Transit Benefits: For commuters, the monthly limit for parking and qualified transportation benefits has increased to $325 each, providing a helpful boost for tax-free transportation savings.
3. Qualified Small Employer Health Reimbursement Arrangement (QSEHRA): Small businesses offering QSEHRAs can now reimburse up to $6,350 for individual coverage and $12,800 for family coverage, adding significant value to healthcare reimbursement options.

These 2025 updates offer brokers an excellent opportunity to provide clients with more strategic and compliant benefit options. Advising on these changes can help employers align with IRS limits and optimize benefits for their workforce. As we enter the new tax year, encourage your clients to review and adjust their benefit plans to capture these tax advantages and avoid compliance issues.

For an in-depth look at 2025 HSA contributions and HDHP adjustments, check out our recent blog on the 2025 HSA updates.