Can employers add to employee Health FSA contribution?
Employer Health FSA contributions drive goodwill, better health security for employees, and bigger tax savings for both. Learn more about employer options in matching contribution methods. Employee contributions A Health FSA is a part of an employer's Section 125 plan that allows employees to set aside pre-tax dollars to pay for out-of-pocket medical expenses. During the employer's open enrollment period each year, every employee determines how much to set aside for the health FSA contribution by estimating eligible out-of-pocket medical expenses throughout the plan year. That amount is then divided into every pay period as a pre-tax salary reduction. Employer sets Health FSA rules Employees decide how much they need in a Health FSA, but when it comes to how FSA contributions are managed, the employer sets all the rules , including: While the IRS 2020 pre-tax maximum* for employee Health FSA contributions is $2,750, an employer may limit its employees to less than $2,750