FSAs let employees set aside tax-free dollars to save on eligible expenses. And employers save on FICA taxes when employees contribute to these accounts. There are four types of FSAs:
• Medical FSAs, which cover medical, dental, vision and preventive care expenses.
• Limited Medical FSAs, which cover dental, vision and preventive care expenses.
• Combination Medical FSAs, which start as Limited FSAs and convert to Medical FSAs when the IRS deductible has been met.
• Dependent Care FSAs, which cover dependent care expenses.
The top concern for nearly half of FSA participants is the need to meet the IRS’ requirement of substantiation, or submitting documentation for eligible expenses. We’ve added automation to this process with the WEX debit card. Our debit card eliminates the need to manually substantiate claims when used at certain merchants, so more than 85% of our claims are automatically approved.
Employees can easily access their funds and submit claims for all of their accounts in one place by using the Benefits Mobile App from WEX and their online accounts. The Benefits Mobile App also has an eligible expense scanner, which lets employees scan bar codes of items to determine if they’re eligible to purchase using FSA funds.
Would you like to learn more about each type of FSA? Watch our video in the Related Links section: