At Justworks, we’re always working to add great benefits to our platform that will help you easy and affordable to take care of your team and attract new talent,. Our latest addition to this roster of benefits is Flexible Spending Accounts (FSAs).
FSAs stand for Flexible Spending Accounts and they help employees use pre-tax dollars to pay for healthcare and dependent care expenses. Any money allocated towards an FSA lowers your taxable income and saves both the company and the employee money on taxes. Employees get to choose how much they’d like to allocate based on their predictable expenses.
By signing up to offer FSAs, a benefit that more and more employees are expecting from their employer, companies are giving their employees the opportunity to pay out-of-pocket health care and/or dependent daycare expenses using pre-tax dollars.
We’re currently offering two types of FSAs:
Healthcare FSA: This can cover IRS-approved medical, dental or vision expenses that a member would otherwise pay for out-of-pocket. You can use it for copayments, co-insurance, deductibles, prescription medications, and more. Members can contribute up to $2,550 per year. For a full list of covered expenses, visit IRS publication 502.
Dependent Care FSA: This allows individuals to use pre-tax dollars to pay for the work-related cost of care for a qualifying dependent. Members can contribute up to $2,550 or $5,000 per year (depending on whether married couples are filing joint or separate returns). For a full list of covered expenses, visit IRS publication 503.
If you’re curious to learn more, check out our blog post on FSAs.
Once you’ve signed up, our team will set up an open enrollment and your employees will be able to enroll online in Justworks, like they do for healthcare.
Some important notes on FSAs:
Monthly fee: There’s a monthly FSA fee of $3.95 which is paid for by the company.
Healthcare required: Only companies offering healthcare are eligible to offer FSAs through Justworks.
Use it or lose it: FSAs run on a calendar year and will expire on January 31st, regardless of when your employee enrolls. Funds will not roll over into the next year.
Owners and FSAs: Owners are not eligible for FSAs.
Employee enrollment is easy. Once a company decides to offer an FSA, employees will receive an email letting them know about the new benefit and they’ll be invited to enroll online.
There are literally thousands of eligible expenses that can be reimbursed using FSA funds — employees with be delighted with this additional benefit!
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