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Comp and Benefits Brief

November 15, 2019

2020 Employee Benefit Plan Limits

The IRS has released the 2020 cost-of-living adjustments for limits on employee benefits with some adjustments to the 2020 rates including minor increases to the maximum elective deferrals, the maximum benefits allowed under Code Section 415, maximum compensation used in determining benefits, and the taxable wage base.  Below is an updated chart on 2020 limits.

Limits for 2020 – Qualified Plans

Limitation

2019

2020

Elective Deferrals (401(k) and 403(b) pre-tax contributions; 457(b), 402(g)(3))

$19,000

$19,500

Catch-up Contributions – 401(k), 403(b), 457(b), SARSEP plans

$6,000

$6,500

Highly Compensated Employee (HCE) – 414(q)

$125,000

$130,000

Annual Compensation Limit – 401(a)(17), 404(l), 408(k)(3)(C),  408(k)(6)(D)(ii)

$280,000

$285,000

Key employee – 416(i)(1)(A)(i), top heavy and 409A specified employee

$180,000

$185,000

Defined Contribution Plan total annual contributions – 415(c)

$56,000

$57,000

Defined Benefit Plan Maximum benefit – 415(b)

$225,000

$230,000

ESOP – for determining the length of the general five-year distribution period

$225,000

$230,000

ESOP – maximum account balance subject to five-year distribution period

$1,130,000

$1,150,000

 

Limits for 2020 – Tax Withholding Wage Base

Limitation

2019

2020

Taxable Wage Base

$132,900

$137,700

 

Limits for 2020 – High Deductible Plans, Health Savings Account and FSAs

Limitation

2019

2020

High Deductible health plan – IRS limits self/family

 

-annual deductible –minimum

 

-out of pocket expenses (HSA) – maximum

 

 

 

$1,350/$2,700

 

$6,750/$13,500

 

 

 

$1,400/$2,800

 

$6,900/$13,800

 

HSA Contribution limit – individual/family

$3,500/$7,000

$3,550/$7,100

HSA Contribution catch-up

$1,000

$1,000

FSA (flexible spending account – health)

$2,700

$2,750

FSA (dependent care account)

$5,000

$5,000

Out of pocket expenses (ACA) -PHSA §2707(b) maximum (in-network essential health benefits for non-grandfathered plans)

  • Self Only
  • Embedded Individual Max within Family Coverage
  • Family

 

 



$7,900

$7,900

$15,800

 

 

 



$8,150

$8,150

$16,300

 

 

Limits for 2020 – Affordable Care Act

Limitation

2019

2020

ACA affordability safe harbor

9.86%

9.78%

 

Penalties for 2020 – Affordable Care Act

Penalty

2019

2020

No Offer of Coverage

$2,500

$2,570

Offer of coverage lacks minimum value or affordability

$3,750

$3,860

 

Limits for 2020 – Qualified Transportation Fringe Benefit

Limitation

2019

2020

Transit pass, van pool

$265

$270

Qualified Parking

$265

$270

 

PBGC Premiums for Defined Benefit Pension Plans – 2020

Premium

2019

2020

Flat rate per participant

$80

$83

Variable rate for $1,000 of unfunded vested benefits

$43

$45

Per Participant Variable Cap

$541

$561

 

Nelson Mullins Executive Compensation and Employee Benefits attorneys are ready to assist with your compensation and benefits related matters in a cost-effective and responsive manner. Please contact one of our Executive Compensation and Employee Benefits partners or the Nelson Mullins attorney with whom you work.

This Comp & Benefits Brief is a periodical publication of Nelson Mullins Riley Scarborough LLP and should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult a lawyer concerning your own situation and any specific legal questions you may have. © 2019 Nelson Mullins Riley & Scarborough LLP. All Rights Reserved.