When you enroll in a pre-tax benefit, you choose the total amount of pre-tax money you want to set aside from your paycheck and put into that account.
However, when the money is added into the account depends on what kind of account it is: Some benefits are funded the entire amount all at once, and others get a little bit from each paycheck as the year goes on.
Front-loaded accounts
- Health care FSA (FSA)
- Limited purpose FSA (LPFSA)
WIth front-loaded accounts (also called pre-funded), your total annual election is immediately available when the account is opened. During the plan year, you will see regular pre-tax payroll deductions for LPFSA or FSA but the account balance on Forma will only change as you spend. You can’t add more money into the account unless you have a qualifying life event (QLE) that allows you to change your election amount mid-year.
Payroll-funded accounts
- Dependent Care FSA (DCFSA)
- Health Savings Account (HSA)
- Parking
- Transit
These accounts start with a $0 balance when they’re opened, and instead a set amount is deposited into them as a contribution each pay period. The contribution amount is typically your total election (annual election for DCFSA and HSA accounts, monthly elections for Parking and Transit accounts) divided by the number of pay periods.