The Washington Report

November 6, 2024

Note to Subscribers

While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change after our publication deadline.

Retirement

 

IRS Releases 2025 Official Indexed Figures for Retirement Plans and Other Employee Benefit Plans; 401(k) Contribution Limit Increases to 23,500 in 2025
The Internal Revenue Service (IRS) issued Information Release 2024-285 on November 1, 2024, providing the 2025 official indexed figures for retirement plans and other employee benefit plans. The IRS issued technical guidance detailing these items in Notice 2024-80. Following are the official limits of most interest to large and medium employers, as well as the official 2025 key employee pay thresholds for top-heavy plans.

Section 402(g) annual dollar limit for pre-tax contributions to Section 401(k), 403(b), and 457 plans: $23,500 (up from 2024 limit of $23,000)

Section 414(v) annual dollar limit on catch-up contributions for age 50 and over: $7,500 (unchanged from 2024 limit) (Note: Under a change made in SECURE 2.0, a higher catch-up contribution limit applies for employees aged 60, 61, 62 and 63. For 2025, this higher catch-up contribution limit is $11,250 instead of $7,500.)

Section 414(q) pay threshold for highly compensated employees: $160,000 (up from 2024 limit of $155,000)

Section 415 limit for defined benefit plans: $280,000 (up from 2024 limit of $275,000)

Section 415 limit for defined contribution plans: $70,000 (up from 2024 limit of $69,000)

Section 401(a)(17) recognizable pay limit: $350,000 (up from 2024 limit of $345,000)

Section 416 pay threshold for key employees in a top-heavy plan: $230,000 (up from 2024 limit of $220,000)

IRS Information Release 2024-285 is available here.

IRS Notice 2024-80 is available here.

For more information, see the Aon bulletin entitled IRS 2025 Official Indexed Figures for Retirement Plans and Other Employee Benefit Plans, in the Publications section of this newsletter.

Aon Publications

 

IRS 2025 Official Indexed Figures for Retirement Plans and Other Employee Benefit Plans
The Internal Revenue Service (IRS) issued Information Release 2024-285 on November 1, 2024, providing the 2025 official indexed figures for retirement plans and other employee benefit plans. The IRS issued technical guidance detailing these items in Notice 2024-80. 

The Aon bulletin, which provides the official limits of most interest to large and medium employers, as well as the official 2025 key employee pay thresholds for top-heavy plans, is available here.

IRS Issues Contraceptive Safe Harbor, Expands and Clarifies Pre-Deductible Preventive Care Coverage in HDHPs
The Internal Revenue Service (IRS) has issued a safe harbor rule confirming that condoms qualify as “medical care” under Internal Revenue Code Section 213(d). As a result, expenses for condoms can be reimbursed from a health care flexible spending arrangement, an Archer medical savings account, a health reimbursement arrangement, or a health savings account. 

Additional IRS guidance permits a high-deductible health plan (HDHP) to offer pre-deductible coverage for male condoms and over-the-counter oral or emergency contraceptives. The IRS guidance also permits pre-deductible HDHP coverage for breast cancer screenings (in addition to mammograms) and Continuous Glucose Monitors and clarifies pre-deductible HDHP coverage for insulin and insulin devices. 

The Aon bulletin is available here.

Departments Issue FAQs on Coverage of Preventive Services and WHCRA Benefits
On October 21, 2024, the Departments of Labor, Treasury, and Health and Human Services (Departments) issued joint Frequently Asked Questions (FAQs) addressing coverage of preventive services under the Affordable Care Act and coverage of reconstructive services required under the Women’s Health and Cancer Rights Act (WHCRA). 

The Aon bulletin is available here.