Health savings accounts (HSAs) have become increasingly popular but they often come with misconceptions. To help employees make informed decisions, let’s debunk common HSA myths and shed light on the HSA facts that matter. HSA Fact #1: HSAs are Employee-Owned While employers may choose to contribute to an employees’ HSA, it’s important for employees...
Expanded public transit. The rise and rebound of ridesharing. Increased work-from-home arrangements. The work commute has changed a lot recently, as lawmakers and civic officials grapple with how to effectively support people traveling to and through ever-growing cities. New York City, Washington, D.C., Chicago, Philadelphia and Seattle are among cities that have enacted laws and...
What are pre-tax savings and post-tax savings? Understanding taxes relating to health savings accounts (HSAs), flexible spending accounts (FSAs) and other benefits plans can be time-consuming and difficult to explain. Pre-tax savings are tied directly to FICA taxes. You may be wondering what FICA is and how does pre-tax savings work for HSAs and FSAs?...
In 2023, mental health became a top priority for employees and employers. According to a SHRM study, 41% of U.S. employees said they would likely or would very likely leave their current job if they were offered a new position with significantly improved mental health benefits. While many companies offer employee assistance programs (EAPs), it’s...
Welcome to 2024! As we get ready for another year of sharing the latest benefits trends and practical tips to enhance you and your employees’ benefits experience, let’s look back at our most popular blog posts from 2023. Get the Best Results from Your Benefit Budget Conversations Benefits are critical for attracting and retaining...
As we age, the importance of maintaining safe mobility within our home becomes critical. It is crucial to understand how to save money on common at-home expenses with health savings accounts (HSA) and flexible spending accounts (FSA). From home modifications to adaptive equipment, creating an environment that not only nurtures a person’s well-being but also...
Did you know that, when employees were asked on a scale of 1 to 10 how confident they are in their understanding of their benefits, 34% chose 7 or less. Only 25% responded with a 10. That was just one of the findings from a survey of benefits participants WEX launched in May 2023. Often,...
When it comes to navigating the world of employee benefits, there’s a lot to take in, especially if you’re a first timer. Among the suite of benefits you’re likely to be offered, voluntary benefits are often misunderstood. What are Some Examples of Voluntary Benefits? Voluntary benefits include a variety of options, all designed to...
As most organizations are already in the thick of annual benefits enrollment, the IRS announced that employees can funnel an extra $150 into their health flexible spending accounts (FSAs) next year. The annual contribution limit is rising to $3,200 in 2024, up from $3,050 in 2023. If the employer’s plan permits the carryover of unused...
A flexible spending account (FSA) lets you save money by setting aside pre-tax dollars to pay for eligible medical, dental, vision and dependent care expenses incurred by you, your spouse, or your eligible dependents. Whether you’re a newcomer to the account or have routinely participated in this benefits staple, we’ve compiled answers to some common questions to help you better understand your FSA. Or check out this episode of Benefits Buzz to learn eight things you should know about medical FSAs.
How does an FSA work?
You’re able to set aside pre-tax dollars from your paycheck to pay for eligible expenses. Putting money into a flexible spending account decreases your taxable income, which means you’ll take home more money.
What are the different types of accounts?
There are four common types of accounts:
Medical FSA, which covers eligible medical, dental and vision expenses.
Limited medical FSA, which covers eligible dental, vision, and preventative care expenses. Unlike a medical FSA, it can be paired with a health savings account (HSA) and a high-deductible health plan (HDHP).
Combination FSA, which is a limited FSA that converts into a medical FSA once the IRS deductible is met.
Dependent care FSA, which covers eligible daycare (up to age 13) and dependent care expenses if certain conditions are met.
When can I enroll?
You can enroll during open enrollment, at the time of your hire or if you have a status change.
How much can I contribute?
IRS contribution limits in 2022 allow you to set aside $2,850 into a medical or limited FSA and $5,000 into a dependent care FSA.
Can I change my annual election amount?
You can change your election amount if you have a status change. Status changes include:
Employment
Marriage
Divorce
Birth
What happens if I have money left over at the end of the year?
The IRS has a use-it-or-lose-it rule for FSAs, which means funds must be spent by the end of the plan year unless your employer offers a grace period or carryover.
What is FSA eligible?
Eligible expenses are determined by the IRS and include a variety of products and services. Visit our searchable list to see what kinds of expenses are eligible.
How can I spend my FSA funds?
The WEX benefits debit card works anywhere that offers an Inventory Information Approval System (IIAS) or at merchants that meet the IRS’ 90 percent rule. If used at an IIAS merchant, simply swipe your card to have any eligible expenses automatically approved. You can also pay out of pocket and request reimbursement.
How does reimbursement work?
For out-of-pocket expenses and some debit card purchases, the IRS requires more documentation to validate those purchases were for eligible items or services. You’ll be notified via mail or email if more documentation is required. You can submit documentation through your online account, mobile app or via fax or mail, and you can receive reimbursement via your debit card, direct deposit, or check.
What needs to be on documentation for reimbursements?
The IRS requires that documentation include:
Amount of expense
Date of purchase
Product description
Provider or merchant name
An Explanation of Benefits (EOB) typically contains the information the IRS requires. If an EOB isn’t available, you can also submit an itemized receipt if it has the necessary information.
We offer several tools and resources to help you make the best FSA decisions. Check out our website.