HR Fast Facts: What Are the Limits on Employer Contributions to Health Care FSAs?

Learn about limits to employer Health Care FSA contributions.

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HR 101: The ABCs of FSAs

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.

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