What Should Employers Know About the New 2024 HSA And FSA Contribution Limits?

Why Is This Important?

FSAs and HSAs provide an excellent option for your employees to manage their medical expenses better. And with the rising cost of healthcare in the USA, it is prudent that the health of your employees is comprehensively protected.

Therefore, keeping abreast of the new limits is essential because it ensures your employees are taking advantage of the tax-saving benefits of FSAs and HSAs. At the same time, it provides that they can, at the very least, afford part, if not all, of their healthcare costs – which is vital amidst the continuously rising cost of healthcare.

The flexibility these two accounts offer ensures that your employees can strategically contribute to take care of their immediate health needs. And with the increase in the 2024 HSA and FSA contribution limits, they can account for more treatments or medical expenses.

And with the FSA, employees can enroll in a Dependent Care FSA to ensure their children and adult dependants are cared for and still enroll in an HSA. On the other hand, employees can roll over their HSA funds to the following year and accrue interest to use them as an investment or a savings account.

In a medical emergency, they can use the HSA funds to boost the FSA to ensure medical costs are adequately covered. Therefore, there is no waste of money here. HSAs also allow employees to spend on healthcare expenses, reducing out-of-pocket costs.

Besides, There are Perks for You as an Employer as Well

Knowing how to leverage both can help you provide your employees with a benefits package that meets their needs. And by demonstrating this kind of employee support, you are likelier to increase your employee satisfaction and retention.

Additionally, HSA and FSA contributions allow you to provide your employee's coverage without compromising your bottom line. Your contributions should not surpass the 2024 HSA and FSA contribution limits when added to your employees' contributions.

So, you give your employees control over their medical coverage, protect your bottom line, and enhance satisfaction and retention.

What can You Do?

Empower your workers with information. But with the dissatisfaction employees have felt about their work and employers, you must go beyond basic knowledge to sustain satisfaction and retention at work. Don't settle for ensuring your employees know about their 2024 HSA and FSA contribution limits.

Instead, tell them how to determine eligibility and how they can reduce their taxable income using the 2024 HSA and FSA contribution limits. Don't forget the nitty gritty, like ensuring they know how the individual and family limits differ if they choose an FSA or an HSA.

Give them tips on how to maximize use of the accounts. For instance, if married partners have individual FSA accounts through their employers, they can choose the maximum $3,200 limit and have combined 2024 FSA limits of $6,400. And keep the conversation about the new 2024 HSA and FSA contribution limits going throughout the year until open enrollment.

Conclusion

If your employees worry about their financial health, then you can bet that your productivity and sustainability will also suffer. And among the financial stressors that give your employees sleepless nights is increasing healthcare costs. 

So, like it or not, you have a responsibility to your employees to ensure they make the most informed decisions about their benefits and health insurance coverages. To that effect, the new year came with new 2024 HSA and FSA contribution limits that give your employees a chance to better manage their medical expenses.

Consider offering tools or consultations for personalized planning assistance. By actively engaging in these steps, you enhance your employees' financial well-being and foster a culture of care and support within your organization. Contact our team today for resources and expert advice on implementing these changes effectively.