Mercer projects 2026 transportation and health FSA limits 

July 24, 2025

Mercer projects the 2026 limits for qualified transportation (parking and transit) benefits and health flexible spending arrangements (FSAs) will increase from 2025 levels. These unofficial 2026 limits are determined using the Internal Revenue Code (IRC)’s cost-of-living adjustment methods, the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) values through June and Mercer’s projected C-CPI-U for July and August. While adoption assistance program limits generally use the same indexing formula, they can’t be reliably projected due to the small rounding threshold. IRS usually announces the official limits for these benefits — along with long-term care limits (based on the medical component of the August C-CPI-U) — in October or November.

Limits for qualified transportation fringe benefits and health FSAs are expected to rise in 2026, due to the anticipated increase in average C-CPI-U for the year. The anticipated increase in the qualified transportation fringe benefit limit also reflects the one-year shift in the base year for measuring inflation ­­­­­­— from 1998 back to 1997 ­— as enacted by the “One Big Beautiful Bill Act” (Pub. L. No. 119-21). Without the adjustment, the 2026 limit was projected to be $335.

• One Big Beautiful Bill Act, Pub. L. No. 119-21 (Congress, July 4, 2025)
• C-CPI-U (Bureau of Labor Statistics)

• One Big Beautiful Bill includes employer-friendly provisions (July 8, 2025)
• 2026 HSA, HDHP and excepted-benefit HRA figures set (June 27, 2025)
• Summary of 2025 benefit-related cost-of-living adjustments (Jan. 24, 2025)
• Quick benefit facts for 2025 (Jan. 16, 2025)
• Quick benefit facts and COLA resources for benefit plans (2021–2025)