The Tax Cuts and Jobs Act (aka “Tax Reform”) enacted December 22, 2017, changed the measure of inflation to the average chained CPI-U (C-CPI-U) for the 12 month period ending August 31.
The August 2020 CPI was released by the Department of Labor. Thomson Reuters used the C-CPI-U for the 12 month period ending August 31 to reported projected inflation adjustments for 2021 for health, charitable, compliance and other specialty items.
The updates for QSEHRA and Transportation benefits are as follows:
Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) 2021
A QSEHRA under Code Sec. 9831(d)(2) is an arrangement which, among other requirements, makes payments and reimbursements for qualifying medical care expenses of an eligible employee.
The limits for 2021 are projected to increase as follows:
- $5,300 for the employee only; or
- $10,700 for an employee plus family members of the employee
These limits are up slightly from $5,250 and $10,600 for 2020.
Qualified Transportation Plan 2021
The limits for 2021 will remain the same.
- Parking $270 per month
- Transit (transit passes and/or transportation in a commuter highway vehicle) $270 per month
These benefit plan adjustments are not official until the IRS releases a Revenue Procedure on this and other benefit limits later this fall and we will report any additional updates to these limits as they may become available.