How Do I Choose My Employer Contribution for Employees' FSAs?
You can also set optional and separate contributions to your employees' Medical and/or Dependent Care FSAs when you set up the plan, before employees choose their own contributions.
How much can I contribute to employees' Medical FSAs?
You can match employee's Medical FSA contributions from $0 up to the maximum of $2750 ( 2020 annual limit) and $2700 (2019 annual limit). Since you can't predict ahead of time what employees elect, if any individual employee sets contribution amounts less than yours, Zenefits simply reduces your contribution to match theirs.
If the FSA is a shortened plan year then the maximum contribution and matching amount will be prorated. So if the company is enrolled in the FSA effective 7/1 through 12 /31, the employee would only be able to contribute half of the maximum amount, which would be $1375 for 2020. This would then be the maximum that the employer is able to match.
How much can I contribute to employees' Dependent Care FSAs?
The maximum annual amount you can contribute to a Child & Elderly Care FSA depends on which filing status you choose on your federal tax return.
If you choose a filing status of:
- Single or married, filing jointly, you can contribute up to $5000.
- Married, filing separately, you and your spouse can each contribute up to $2500 each.
How do I choose the right amount for either?
How much you choose to contribute to your employees' FSAs is up to you, but here are some things to consider when you're making the decision.
- The amounts you set for each type are the annual amounts you'll contribute to each employee who enrolls in that type, so consider the possibility that all eligible employees enroll when determining how much you're willing to spend.
- You can't change your contributions after the plan starts until the end of the plan year, during renewal.
- Employees will be able to see the amounts you've chosen to contribute for both Medical and Dependent Care FSAs when they enroll.
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