English (CA) English (GB) Español Français (Canada)
  1. HCM Help Center
  2. Benefits Administration
  3. User Guides
  4. Benefits - Plans

How to Set up Flexible Spending Accounts (FSA)

[[ video.video_data.title || (video.article_name + ' - ' + video.video_id) ]]
Not allowed

How to Set up Flexible Spending Accounts (FSA)

Contents

A Flexible Spending Account (FSA) or Arrangement is a program that employers can use to help employees pay for certain expenses with PRE-TAX dollars.

image-55.png

Helpful Info:

  • FSAs are provided and owned by the employer
  • Only employee and employer can contribute to account
  • Only employee can elect coverage (no dependent selection option like other plan models) but employee can enroll dependents in an underlying medical plan
  • Plans have a Minimum and Maximum contribution amount - set by employer on plan level

3 Kinds of FSAs (It is required to set up each plan type separately if offering different types of FSA plans)

  • Healthcare FSA
  • Dependent Care FSA
  • Limited Purpose FSA (LPFSA)

This benefit set up process includes the following sections:

  • Policy Info (Standard - Same as other plan set up)
  • Eligibility (Standard - Same as other plan set up)
  • Contributions
  • Additional Settings (Standard - Same as other plan set up.)
  • Resources (Standard - Same as other plan set up.)

Set up contributions for Healthcare FSA plans

Both employee and employer can contribute to the Healthcare FSA plans.

Employer’s contribution can be set as an ANNUAL flat dollar amount or a percentage of employee’s contribution. Employer’s contribution will be allocated per pay basis.

Employee’s contribution can be setup with a minimum and maximum ANNUAL contribution. The rollover amount is the amount that Employers can allow enrollees to carry over next year.

image-56.png

Set up contributions for Limited Purpose FSA plans

As described in Medical Plan set up process, you have an option to mark a medical plan as a High Deductible Health Plan (HDHP) while setting up a medical plan. When setting up Limited Purpose Flexible Spending Account (LPFSA) plans, you need to associate compatible medical plans to the LPFSA plan under contribution section.

Both employee and employer can contribute to the Healthcare FSA plans.

Employer’s contribution can be set as an ANNUAL flat dollar amount or a percentage of employee’s contribution. Employer’s contribution will be allocated per pay basis.

Employee’s contribution can be setup with minimum and maximum ANNUAL contribution.

image-57.png

Set up contributions for Dependent Care FSA plans

Both the employee and employer can contribute to the Healthcare FSA plans.

Employers' contributions can be set as an ANNUAL flat dollar amount or a percentage of employee’s contribution. The employer’s contribution will be allocated per pay basis.

Employee’s contribution can be setup with minimum and maximum ANNUAL contribution.

image-58.png

NOTES

  • Employee and employer contributions cannot exceed annual Internal Revenue Services (IRS) maximum contribution limit.
  • Employees are not required to enroll in a health plan in order to enroll in the Healthcare FSA. This means an employee can decline medical coverage and still elect a Healthcare FSA during their enrollment. However, enrollment in HSA and LPFSA requires a medical compatible medical plan enrollment.
Not Allowed