For every pre-tax account, you choose an amount of money that you want to contribute for that year. This is called your annual election.
The IRS places yearly limits on annual elections for each account. For more information about those limits, check out this article.
Pre-funded
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FSA, LPFSA, HRA
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Your employer deposits the total annual election amount on the first day the account is opened. The total annual election amount is available for you to spend starting on day one of your plan year.
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Then, money is deducted pre-tax from each paycheck over the course of the year. Those payroll contributions go toward paying back your employer. That means you won’t see the account balance increase with each paycheck.
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Exception
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Health Reimbursement Accounts (HRAs) are the exception here. With HRAs, employees aren't responsible for paying back the employer at all.
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Payroll-funded
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DCFSA, HSA, Commuter Transit
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Money is deducted pre-tax from each paycheck over the course of the year according to your annual election amount.
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It’s deposited directly from your paycheck to the account, so you’ll need to wait for the account balance to accumulate over time. You will see the account balance increase with each paycheck.
If you have any questions about this, please reach out to our Member Experience Team at support@joinforma.com or send us a live chat message through your Forma mobile app!
For questions regarding pre-tax accounts (HSA, FSA, DCFSA, etc.) you can also reach us by phone at 844-902-2902 Monday through Friday, 8 AM EST - 8 PM EST. We're here to help!