NEWS
Do Employer Contributions Count Toward the Contribution Limit That Applies to Health FSAs?
Often a cafeteria plan which includes a health FSA is funded solely by employee salary reductions. Employers can choose to add an employer contribution feature to the health FSA, such as a matching or seed contribution. Would these employer contributions count toward the limit that applies to health FSAs?
The statutory limit (which is $3,200 for plan years beginning in 2024, and $3,300 for plan years beginning in 2025) applies only to health FSA salary reduction contributions. However, employer contributions also raise other compliance issues.
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