Sec. 9005. LIMITATION ON HEALTH FLEXIBLE SPENDING ARRANGEMENTS UNDER CAFETERIA PLANS

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## SEC. 9005 LIMITATION ON HEALTH FLEXIBLE SPENDING ARRANGEMENTS UNDER CAFETERIA PLANS ###

(a)In General Section 125 of the Internal Revenue Code of 1986 is amended— ####

(1)by redesignating subsections

(i)and

(j)as subsections

(j)and (k), respectively, and ####

(2)by inserting after subsection

(h)the following new subsection: > > ### “(i) Limitation on Health Flexible Spending Arrangements > > > #### “(1) In general > > For purposes of this section, if a benefit is provided under a cafeteria plan through employer contributions to a health flexible spending arrangement, such benefit shall not be treated as a qualified benefit unless the cafeteria plan provides that an employee may not elect for any taxable year to have salary reduction contributions in excess of $2,500 made to such arrangement. > > > #### “(2) Adjustment for inflation > > In the case of any taxable year beginning after December 31, 2013, the dollar amount in paragraph

(1)shall be increased by an amount equal to— > > > ##### “(A) > > such amount, multiplied by > > > ##### “(B) > > the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which such taxable year begins by substituting ‘calendar year 2012’ for ‘calendar year 1992’ in subparagraph

(B)thereof. > > If any increase determined under this paragraph is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.” > . ###

(b)Effective Date **[**[26 U.S.C. 125 note](/us/usc/t26/s125)**]** The amendments made by this section shall apply to taxable years beginning after December 31, 2010.

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U.S. Code

Cafeteria plans
§ 125

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Sec. 9005

LIMITATION ON HEALTH FLEXIBLE SPENDING ARRANGEMENTS UNDER CAFETERIA PLANS

U.S.C.§ 125

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