Mercer projects 2027 transportation and health FSA limits
June 11, 2026
Mercer projects the 2027 limits for qualified transportation (parking and transit) benefits and health flexible spending arrangements (FSAs) will increase from 2026 levels. These unofficial 2027 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) — for the coming year in October or November.
Qualified transportation and health FSA limits
Limits for qualified transportation fringe benefits and health FSAs are expected to rise in 2027, due to the anticipated increase in average C-CPI-U for the year.
| Qualified transportation and health FSA limits | Projected 20271 |
2026 |
|---|---|---|
| Tax-free qualified transportation fringe benefits (IRC § 132(f)) | ||
| Qualified parking, transit pass, or commuter highway vehicle | $350 | $340 |
| Health FSA limits (IRC § 125(i)) | ||
| Salary-reduction contribution | 3,500 | 3,400 |
| Carryover to next plan year | 700 | 680 |
1 BLS did not publish CPI figures for October 2025 due to the federal government shutdown. IRS has not announced how it will adjust for the gap, but the projected limits should not change.
Related resources
Non-Mercer resource
- C-CPI-U (Bureau of Labor Statistics)
Mercer Law & Policy resources
- 2027 HSA, HDHP, and excepted-benefit HRA figures set (May 29, 2026)
- Summary of 2026 benefit-related cost-of-living adjustments (March 2, 2026)
- 2026 quick benefit facts (January 21, 2026)
- Quick benefit facts and COLA resources for benefit plans (2022–2026)
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