HSA, FSA & Commuter Benefits: What They Are & How They Help Your Employees

Your employees are the face of your business, and you couldn’t operate without them. So the best way to show employees you value them is by offering a generous benefits package. 

According to one study, 78% of employees are more willing to stay with their current employer due to their benefits package. In fact, three out of 10 employees said they would be willing to trade a higher salary for better benefits. 

And MetLife found that healthcare still tops the list when it comes to expected employee benefits. So if you’re not sure where to start, let’s look at three valuable benefits you can begin offering your employees. 

HSA, FSA & Commuter Benefits

For many employees, healthcare and commuting costs are a significant point of stress. That’s why offering HSA, FSA and commuter benefits is a great place to start. 

Here is an overview of each of these benefits, what they cover and how they help your hourly employee:

HSA Benefits

A Health Savings Account (HSA) is a savings account that lets you set aside pre-tax money for qualified medical expenses. To set up an HSA, employees must first have a High Deductible Health Plan (HDHP). 

An HDHP is a plan that only pays for preventative services until the deductible has been paid. Once the deductible has been met, the plan can cover non-preventative services. 

Employees can fund their HSA whenever they like, and use it to pay for the following medical expenses:

• Insurance copays
• Deductibles
• Certain prescription drugs
• Insulin
• Medical devices 

FSA Benefits

A Flexible Spending Account (FSA) is a tax-advantaged account that employees use to set aside money for medical expenses. Your employees contribute money every month in their FSA, and they can use the funds to pay out of pocket for qualified medical costs.

Employees can use their FHA to pay for the following expenses:

• Insurance copays
• Deductibles
• Certain prescription drugs
• Insulin
• Medical devices

If there is money left over at the end of the year, employees have two and a half months to spend it. Or, you can give them the option to carry up to $500 into next year’s plan. 

Commuter Benefits

Commuter benefits are a great option for employees that have high commuting costs. These plans allow employees to use tax-free money to pay for their daily commuting costs. 

When they enroll in the program, they can contribute up to $270 per month into the tax-advantaged plan. They can use the money to pay for the following commuting costs:

• Bus, subway, taxi, and trolley rides
• Parking expenses
• Parking meters
• Ridesharing
• Parking garage fees

Because employees commute to work in a variety of ways, they have a lot of options when it comes to how they can use the funds. They can pay for commuting costs via vouchers, transit passes, debit cards, and more. 

How to Get Started

Most employers want to provide a generous benefits package to their employees, but overseeing this can be a huge headache. That’s why it can be helpful to use a benefits administrator like Spur to manage the details for you.

Our pre-tax benefits program is provided by Alice and reduces an employee’s adjustable gross income. This means your business pays less in Social Security, Medicare, local taxes, and unemployment premiums. On average, this reduces the costs by anywhere from 8-12%.

And best of all, we do all the work for your business. We’ll integrate your payroll through Alice and you can invite your employees to join via email, text, Facebook, Instagram, or Slack. 

Your employees will connect the card they plan to use for qualifying purchases and Alice takes care of the rest. Your employees receive access to valuable benefits that will help them with no additional work required on your end. 

And Spur is continually adding new discounted offers on the programs that your employees want. You can contact us to learn more about how to get started with Spur. 

FAQs

What are HSA, FSA and commuter benefits?

• HSA: An HSA is a tax-advantaged savings account for employees who are already enrolled in a High Deductible Health Plan (HDHP). Your employees can contribute pre-tax money to a savings account that they’ll use to pay for qualified medical expenses. They can use their HSA to pay for deductibles, copays, insulin, and medical devices. 
  
• FSA: An FSA is a tax-advantaged savings account for qualified medical expenses. Employees can use the funds to pay for deductibles, copays, insulin, and medical devices. If there is money left over at the end of the year, employees can either spend it within two and a half months or rollover a maximum of $500 into the next year’s plan.
  
• Commuter benefits: A commuter benefits package allows employees to pay for commuting costs with pre-tax money. They can contribute up to $270 per month into the tax-advantaged plan and use the funds to pay for commuting, parking, and ridesharing expenses. 

What is the difference between an HSA and an FSA?

In many ways, an HSA and FSA are similar. Both are tax-advantaged savings accounts that let you pay for qualified medical expenses with pre-tax income. The main difference is with an HSA, your employees have more control over the account and contribution rollovers. And if they decide to switch jobs, their HSA comes with them.

In comparison, an FSA is more employer-controlled and less flexible. And if one of your employees chooses to leave their position, they may have to forfeit their FSA benefits as well. 

Why should I partner with a company like Spur to administer benefits?

Spur makes it easier to deliver the benefits your employees want without it becoming a huge cost or time burden for you. Our pre-tax benefit program is provided by Alice and will reduce the amount you pay in Social Security, Medicare, local taxes, and unemployment premiums. Not to mention, it’s easy to set up, and we’ll worry about things like enrollment, contributions and government compliance reporting for you.