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|
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.