HR Fast Facts: What Are the Limits on Employer Contributions to Health Care FSAs?
Learn about limits to employer Health Care FSA contributions.
Employers can also choose to contribute to employees’ Health Care flexible spending accounts (FSAs) and match up to a maximum of $3,050 in 2023, for a maximum of $6,100 in combined annual contributions.
Since employer contributions are set at the company level during plan setup, employees may elect a lower Medical FSA contribution than their employer. If the employer’s contribution is greater than the employee’s contribution, and the employee contributes:
- More than $500, the employer can only match the lower employee contribution.
- Less than $500, the employer can contribute up to $500.
Employer contribution amounts are set during company plan enrollment, and cannot be changed until the end of the plan year.
Let’s consider some examples:
| Employee Contribution | Employer Contribution | Combined Amount Applied to FSA |
|---|---|---|
| $1,500 | $1,500 (match) | $ 3,000 |
| $1,000 | $1,500 (not a match; only $1000 applies) | $ 2,000 |
| $1,000 | $500 (less than employee) | $ 1,500 |
| $300 | $500 (not a match, but acceptable) | $800 |
| $0 | $500 | $500 |
Non-elective employer contributions to the health FSA, such as an employer match, seed contributions or flex credits, generally do not count toward the limit.
