The 2023 contribution limit for Healthcare Flexible Spending Accounts (FSAs) is increasing to $3,050, an increase of $200 from 2022. The maximum carryover amount that employers may implement also increases to $610 (20% of the contribution limit).

While most employers are busy figuring out the Affordable Care Act (ACA) Employer Mandate and the 2015 ACA reporting requirements, there’s an important tax coming down the road in 2018 to plan for now.

The “Cadillac Tax” is a 40% excise tax applied to any plan whose premiums exceed certain thresholds in 2018.  (Add click here to read more link)  The intention of this section of the ACA is that extremely rich healthcare plans contribute to unnecessary utilization, and thus are being discouraged.  The premium limits are $10,200 for single coverage and $27,500 for family coverage, which sound like enormous amounts.  

But, if you take your monthly premiums this year, and project them 3 years down the road, you’d be shocked at how close you may already be to facing this huge excise tax.  If your premiums today exceed about $640 single or $1,725 family, your plan is already on pace to being a Cadillac plan (assuming 10% healthcare trend).

If you’re in the danger zone, please give us a call at (303) 369-3200 or This email address is being protected from spambots. You need JavaScript enabled to view it. to get some ideas of how to head off this damaging excise tax before it arrives!