How is an FSA funded?
Health Care FSAs are funded by employer transfers using funds deducted on a monthly basis from an employee's paycheck.
The process below describes how FSA accounts are funded.
- Employer "front-loads" the funds for employee FSA accounts.
- The employer deducts the contribution amount every month from the employee's paycheck.
- That money is then held in the company's bank account.
- When an employee uses their Zenefits debit card for medical expenses, the FSA provider pays the bill.
- On a daily basis, the FSA provider will bill the company for any expenses incurred for that day. The employer would pay the FSA provider from their account (including the money deducted from employees' paychecks).
- Card swipes will be displayed as Med-i-Bank, and manual claims will be displayed as Zenefits- Alegeus on the company's bank statement. Learn more.
Example of how FSA funding works for an Employee:
- Employee elects $1200 for their FSA with a plan year of January 1st, 2018 through December 31st, 2018.
- On January 1st, 2018, this employee receives $1200 in his FSA account, which is funded by their employer.
- When the employee swipes their ZFB card or submits claims, the funds are debited from the company’s bank account.
- Each month, this employee will contribute $100 over the plan year of 12 months to pay back the employer for these funds.
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