The IRS raised the employee contribution maximum for Health Flexible Spending Accounts (FSAs) for the 2018 plan year.
Beginning in 2018, employees will be able to contribute a maximum of $2,650 to their Health FSA. Currently, the Health FSA election is capped at $2,600.
FSAs are offered by employers as an employee benefit. A Health FSA is a financial account that allows employees to set aside tax-free money, which is deducted from their paycheck. This money can be used to pay for certain out-of-pocket health care expenses, such as doctor visits; prescription medications and over-the-counter drugs; hearing aids; home medical equipment; thermometers; vaporizers; and wheelchairs.
The employer owns the account, yet employees can spend the money, up to their election amount, prior to it actually being fully funded. FSAs are helpful for employees and families who have high deductibles or copays or who spend a lot on medical items during the year.
Open Enrollment Communications
As open enrollment approaches, employers who include FSAs in their total compensation package must notify their employees of the FSA annual contribution maximum increase. Ongoing open enrollment communications must include updates to employee benefits plans and federal legislation.
The Web Benefits Design benefits administration system’s robust reporting capabilities allows HR administrators to run reports targeting only those employees who are enrolled in a FSA and send bulk communications notifying them that they can increase their election amount, in 2018.
Additionally, when employees use our online enrollment interface, the system will notify employees if they have elected a contribution that is more than the annual maximum, and it will require them to enter a different amount. This protects employers from legal ramifications or from having to follow-up with employees.
It is critical that employers educate their employees about FSAs so they can make knowledgeable financial decisions that are right for them and their families, as well as take full advantage of their existing FSA.
Customized Benefits Enrollment Strategy
We customize clients’ integrated benefits enrollment, HR management, and communications according to their unique benefits plans, employees, and administrative needs. Employers are continuously enhancing their benefits program to provide employees comprehensive health and financial products. We can administer any benefit, including: Medical; Dental; Vision; Health FSAs; Wellness programs; and more with a variety of contribution and funding methods. Each employee enrollment experience is personalized for that employee and finalizes enrollment by providing a detailed Benefit Confirmation Statement (BCS). We tailor our benefits administration system and strategy for each client creating an enterprise-wide, authentic employee benefits experience.
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