Flexible spending accounts
Flexible spending accounts enable employees to set aside pretax dollars through payroll deductions to pay for eligible healthcare and dependent care expenses — saving both the employee and their employer money.
Flexible spending accounts (FSAs) can save both employees and employers money. These accounts enable employees to set aside pretax dollars through payroll deductions to pay for eligible healthcare and/or dependent care expenses.
Because FSAs are funded through pretax payroll deductions, employers who offer FSAs do not pay Social Security and Medicare (FICA) taxes on their employees' contributions to these accounts (except for ministers' contributions).
Employees save, too, since their FSA elections are deducted from their pay before FICA or federal income taxes are taken out, lowering their taxable income. And in most states, state income taxes do not apply.
Types of FSAs
The Board of Pensions partners with HealthEquity to offer two types of FSAs:
- Healthcare FSAs allow participants to pay for eligible medical, dental, and vision expenses, such as deductibles, copays, and coinsurance for doctor's office visits and prescription drugs — all with pretax dollars.
- Dependent care FSAs can be used to pay for eligible expenses for children under age 13 and certain older family members. Examples of eligible expenses include in-home child care, payments to licensed day care facilities, before- and after-school programs, and adult day care.
Eligibility
Employers may choose to offer either or both types of FSAs.
You may offer a healthcare FSA to employees who are eligible to enroll in the PPO or EPO medical option or an eligible, qualified healthcare plan you offer other than those available through the Benefits Plan of the Presbyterian Church (U.S.A.).
You may offer a dependent care FSA to any employee.
A self-employed individual is not considered an employee for FSA purposes and, therefore, is not eligible to participate. However, employed ministers are considered employees for federal income tax purposes even though they are considered self-employed for Social Security purposes (paying SECA taxes instead of FICA).
Cost
Employers pay under $3.85 per month* for each employee who establishes a healthcare and/or dependent care FSA. Only one fee is charged per participant, whether the participant has one type of FSA or both. HealthEquity bills each employer directly for this monthly fee. There are no set-up fees for these accounts. An annual renewal fee applies for employers that newly offer these accounts starting on or after Jan. 1, 2025.
*The fee for employers that offered FSAs through Further and transitioned to HealthEquity is $3.90 per participant per month.
FSAs are typically funded through employee contributions; however, employers may choose to contribute to them as well (limits apply).
Questions about flexible spending accounts?
Employers who currently offer benefits through the Board of Pensions can call 800-PRESPLAN (800-773-7752) (TTY: 711) to speak with an Employer Services representative. They can answer questions about benefits and offer support on administering benefits through Benefits Connect.
PC(USA) employers and congregations are encouraged to reach out to their Church Consultant to help determine which dues package is right for their situation, understand available benefits for staff and how to structure them, and guide faithful benefits decision-making.
Interested in offering benefits for the first time?
PC(USA)-affiliated employers who do not currently offer benefits through the Board can contact our sales consultants. They can help build a benefits experience for organizations so their employees can thrive.
About HealthEquity
HealthEquity is a national leader in health savings and spending account administration. With $14.7 billion in assets under management, HealthEquity guides more than 14 million members across the United States in saving and spending wisely on their healthcare.