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2022 Employee Benefit Plan Limits Announced by IRS

The IRS has released the 2022 cost-of-living adjustments for limits on employee benefits with some adjustments to the 2022 rates including minor increases to the maximum contributions allowed under Code Section 415 for defined contribution plans (e.g. 401(k)), maximum compensation used in determining benefits, and the taxable wage base. Below is an updated chart on the 2022 limits.

Limits for 2022 – Qualified Plans

Limitation

2022

2021

Change?

Elective Deferrals (401(k) and 403(b)) Pre-Tax Contributions; 457(b), 402(g)(3))

$20,500

$19,500

Yes

Catch-Up Contributions – 401(k), 403(b), 457(b), SARSEP Plans

$6,500

$6,500

No

Highly Compensated Employee (HCE) – 414(q)

$135,000

$130,000

Yes

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

$305,000

$290,000

Yes

Key Employee – 416(i)(1)(A)(i), Top-Heavy and 409A Specified Employee

$200,000

$185,000

Yes

Defined Contribution Plan – Total Annual Contributions – 415(c)

$61,000

$58,000

Yes

Defined Benefit Plan – Maximum Benefit – 415(b)

$245,000

$230,000

Yes

ESOP – Determining the Length of the General Five-Year Distribution Period

 

$245,000

$230,000

Yes

ESOP – Maximum Account Balance subject to Five-Year Distribution Period

 

$1,230,000

$1,165,000

Yes

 

Limits for 2022 – Tax Withholding Rates

Limitation

2022

2021

Change?

Taxable Wage Base

$147,000

$142,800

Yes

 

Limits for 2022 – High Deductible Plans, Health Savings Account and FSAs

Limitation

2022

2021

Change?

High Deductible Health Plan – IRS Limits (Self/Family)

  • Annual Deductible – Minimum

  • Out-of-Pocket Expenses (HSA) – Maximum

 

  • $1,400/$2,800

  • $7,050/$14,100

 

  • $1,400/$2,800

  • $7,000/$14,000

 

  • No

  • Yes

HSA Contribution Limit (Individual/Family)

$3,650/$7,300

$3,600/$7,200

Yes

HSA Contribution Catch-Up Limit

$1,000

$1,000

No

Flexible Spending Account (FSA) – Health Care – Employee Contribution

 

$2,850

$2,750

Yes

Flexible Spending Account (FSA) – Health Care – Maximum Carryover

$570

$550

Yes

Flexible Spending Account (FSA) – Dependent Care – Employee Contribution

$5,000

$5,000

No

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

 

 

  • $8,700

  • $8,700

  • $17,400

 

 

  • $8,550

  • $8,550

  • $17,100

 

 

  • Yes 

  • Yes

  • Yes

 

Limits for 2021 – Affordable Care Act

Limitation

2022

2021

Change?

ACA Affordability Safe-Harbor

 

9.61%

9.83%

Yes

 

Limits for 2022 – Qualified Transportation Fringe Benefit

Limitation

2022

2021

Change?

Transit Pass, Van Pool

$280

$270

Yes

Qualified Parking

 

$280

$270

Yes

 

Penalties for 2022 – Affordable Care Act

Penalty

2022

2021

Change?

No Offer of Coverage

$2,750

$2,700

Yes

Offer of Coverage Lacks Minimum Value or Affordability

$4,120

$4,060

Yes

 

PBGC Premiums for Defined Benefit Pension Plans – 2022

Premium

2022

2021

Change?

Flat Rate (Per Participant)

$88

$86

Yes

Variable Rate for $1,000 of Unfunded Vested Benefits

$48

$46

Yes

Per Participant Variable Cap

$598

$582

Yes

Co-authors: Kenneth A. Janik & Lauren Nations

Copyright ©2022 Nelson Mullins Riley & Scarborough LLPNational Law Review, Volume XI, Number 316
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About this Author

Susan E. Stoffer Employee Benefits Attorney Nelson Mullins Atlanta
Partner

Sue practices in executive compensation and employee benefits law. Sue has spent more than 25 years, including many years with a large international law firm based in New York, counseling clients on equity and non-equity incentive plans and complex retirement plan and health and welfare plan compliance issues. Sue also served as the in-house employee benefits counsel for Time Warner Inc., assisting the company with challenging merger and acquisition issues as they related to a multitude of compensation and benefits arrangements covering a wide-spectrum of employee...

404-322-6374
Ann E. Murray Employee Benefits Attorney Nelson Mullins Atlanta
Partner

Ann practices in the areas of employee benefits and executive compensation. She previously served as in–house benefits counsel for a publicly–traded company, so she is able to provide clients with a business–oriented and practical approach to help them stay in compliance with the ever–changing rules.

Ann’s clients include private and public employers, brokers, and individuals. She assists her clients with all types of HR and benefits–related matters, including those relating to:

 

  • ...

404-322-6603
Matthew R. Zischke Employment Lawyer Nelson Mullins
Associate

Matt Zischke has experience advising all types of employers on a variety of benefits matters, including design, implementation, and administration of employee benefit plans such as defined benefit, defined contribution (e.g. 401(k) and 403(b)), equity incentive, deferred compensation, and health and welfare arrangements. Matt’s experience includes SIMPLE IRA, ESOP, cafeteria, wrap, HRAs, HSAs, and severance plans.

404.322.6312
Geoffrey Fay Labor Lawyer Nelson Mullins Law Firm
Associate

Geoffrey has experience advising all types of employers on a variety of benefits matters, including design, implementation, and administration of employee benefit plans such as defined benefit, defined contribution (e.g. 401(k) and 403(b)), equity incentive, deferred compensation, and health and welfare arrangements. He also regularly assists with benefits and executive compensation diligence in M&A transactions and ERISA provisions in offerings and lending transactions.   

Experience

Following is a selected sampling of matters and is provided for informational purposes...

617-217-4730
Kathryn B. Solley Employee Benefits Attorney Nelson Mullins Atlanta
Of Counsel

Kathy focuses her practice on executive compensation, employee benefits, and ERISA law. She works with public and private companies and their employee benefits needs and has worked as in-house counsel with a large electric public utility in the northeast and then with a large, publicly-traded multinational corporation. She also advises governmental pension plans and tax-exempt entities on employee benefits and executive compensation matters.

 

404-322-6375
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