Limits on Employer Contributions to LPFSAs

Since employer contributions are set at the company level during plan setup, employees may elect a lower LPFSA 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.

Non-elective employer contributions to the LPFSA, such as an employer match, seed contributions or flex credits, generally do not count toward the limit. 

Let's consider some examples: