What are the advantages of offering Flexible Spending Accounts?
Offering Medical and Dependent Care FSAs are truly a “no-brainer” for the following reasons:
- Employees save up to 30% on qualified medical and dependent care expenses.
- Employers save the matching FICA tax on employee payroll contributions. In many instances, the FICA savings exceeds the cost of offering the benefit.
- FSAs are low maintenance and highly-regarded benefits.
Can an employer offer FSAs without a group health insurance plan?
Federal regulations prohibit Medical FSAs when an employer does not offer a group health plan. Dependent Care FSAs can be offered regardless of whether or not a group health plan is available.
How does a debit card work with an FSA?
Group Dynamic’s debit card allows FSA participants to access their FSA funds at the point of purchase. No paper claims to file and no more waiting for reimbursement. Debit card participants are encouraged to retain documentation for each card transaction in the event the purchase cannot be approved electronically.
Can an employer contribute to its employees’ FSAs?
Yes. Generally, unless an employer plans to match employee contributions dollar-for-dollar, the maximum employer contribution is $500 per year for a Medical FSA. Employers may also contribute to participants’ Dependent Care FSAs, limited only by the current statutory maximums of $5,000/$2,500.
What type of account access does Group Dynamic provide to FSA participants and plan sponsors?
Participants can access their accounts 24/7/365 via Group Dynamic’s mobile app or secure, on-line Participant Portal. Plan sponsors are provided with access to Group Dynamic’s Employer Portal where they can find instant access to plan details and utilization.
What are the current annual statutory maximums for Medical and Dependent Care FSAs?
Medical FSAs: $3,050 (for the 2023 calendar year)
Dependent Care FSAs: $5,000 for single parents or a married couple filing a joint tax return; $2,500 for a married couple filing separate tax returns.