What are the legal requirements for providing flexible spending accounts?

Washington requires employers to offer their employees a flexible spending account (FSA). Under this law, employers are required to set up a plan that allows employees to contribute a portion of each paycheck to a special account that can be used to pay for certain medical, dependent care, or transportation expenses that are not covered by their employer-sponsored health plan. In order to establish an FSA, employers are required to provide employees with an easily accessible written description of the plan and its cost and benefits. The plan must also include specific information on how contributions are to be made, how pre-tax deductions are to be handled, and how interest payments will be calculated. Employers must also provide employees with an annual disclosure document that outlines the terms and conditions of the plan. This document must include information on any administrative fees, the types of eligible expenses, the maximum contribution limit, and the method of payment. Employers must allow employees to make changes to their plans at least once a year and must provide an easy method for employees to change the amount of their contributions and the type of expenses they are allowed to pay with their FSA. Finally, employers must comply with the reporting requirements under the law, including the filing of an annual report to the Internal Revenue Service.

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What are the legal requirements for providing flexible spending accounts?

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