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2026 Benefits and Payroll Limits Updates: FSA, HSA, 401K, & More - HR ALERTS

2026 Benefits and Payroll Limits Updates: FSA, HSA, 401K, & More

Effective: January 1, 2026

A quick roundup of the major HSA, FSA, retirement plan, and ACA affordability changes employers need to know for 2026.

 

HSA Updates for 2026

Contribution Limits

  • Self only coverage: $4,400

  • Family coverage: $8,750

  • Catch up (age 55 plus): $1,000


New for 2026

  • Direct Primary Care (DPC) arrangements now count as qualified medical expenses and no longer disqualify HSA eligibility.

  • DPC must stay under $150 per month for individuals and $300 per month for families.

  • Individuals enrolled in ACA Bronze or Catastrophic plans may contribute if the plan meets deductible and cost sharing rules.

 

FSA Updates for 2026

Health FSA

  • Maximum employee contribution: $3,400

  • Carryover limit: $680


Dependent Care FSA

  • Maximum contribution (single or married filing jointly): $7,500

  • Maximum contribution (married filing separately): $3,750


Important Notes

  • Employers may set lower limits.

  • Plan documents should be updated before open enrollment.

  • Communicate increases early, especially the higher Dependent Care limit which may affect payroll deductions.

 

Retirement Plan Limits for 2026

401(k), 403(b), 457

  • Employee limit: $24,500

  • Catch up (ages 50 to 59): $8,000

  • Catch up (ages 60 to 63): $12,000

  • Total employee and employer limit: $72,000


IRA

  • Contribution limit: $7,000

  • Catch up: $1,000


SIMPLE IRA

  • Employee limit: $17,000

  • Catch up: $4,000


Defined Contribution Plan

  • Overall limit: $72,000

 

Roth IRA Income Limits for 2026

Single or Head of Household

  • Full contribution: below $153,000

  • Partial contribution: $153,000 to $168,000

  • No contribution: above $168,000


Married Filing Jointly

  • Full contribution: below $242,000

  • Partial contribution: $242,000 to $252,000

  • No contribution: above $252,000


Married Filing Separately

  • Phase out: $0 to $10,000


Roth Contribution Limits

  • Under age 50: $7,500

  • Age 50 plus: $8,600

 

ACA Affordability Threshold for 2026

  • New affordability limit: 9.96 percent of income

  • Up from 9.02 percent in 2025

  • This is the maximum employee contribution allowed for self only minimum value coverage to remain ACA compliant.

 

Get day-to-day updates on 2026 Benefits and Payroll Limits Updates: FSA, HSA, 401K, & More visit the Vida HR Knowledge Center (Vida HR Clients Exclusive).

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