With health insurance costs continuing to rise, employers are looking for ways to help employees manage these expenses without breaking the budget. Based on its 2025 National Survey of Employer-Sponsored Health Plans, Mercer projects an average 6.5% increase in total health benefit costs per employee for 2026 — the highest increase since 2010. Offering Consumer-Driven Accounts like Flexible Spending Accounts (FSA), Dependent Care Accounts (DCA), Health Savings Accounts (HSA), and Transit (TRN) benefits is a smart strategy. These accounts not only give employees more control over their out-of-pocket costs but also provide meaningful tax savings for employers.
What are Consumer-Driven Accounts?
Consumer-Driven Accounts allow employees to set aside pre-tax dollars for qualified expenses. Because these contributions are deducted before taxes, employers reduce their payroll tax liability — including FICA, FUTA, and in many cases, state unemployment taxes — on every dollar employees contribute.
Those savings can really add up, especially for organizations with a large or growing workforce.
How Employers Benefit from Consumer-Driven Accounts
- FSA and DCA: Employer FICA savings typically equal 7.65% of every dollar contributed.
- HSA: Employer contributions are 100% tax-deductible as a business expense.
- Transit (TRN): Contributions are excluded from payroll taxes, providing similar savings to FSAs.
Beyond tax advantages, offering these accounts demonstrates your organization’s commitment to employee well-being — helping your team better manage healthcare, dependent care, and commuting costs.
What’s New for 2026 Contribution Limits?
With next year’s limits set, employers can build Consumer-Driven Accounts into their 2026 benefits budget with confidence. The IRS has announced the following contribution limits for 2026:
- Health FSA: Employees can contribute up to $3,400, an increase from $3,300 in 2025. This allows employees to save more on eligible medical expenses.
- Dependent Care FSA: The maximum exclusion remains $5,000 for single filers and $2,500 for married individuals filing separately. This helps employees manage dependent care costs more effectively.
- HSA: For individuals with self-only coverage, the contribution limit is $4,400, up from $4,300 in 2025. For family coverage, the limit is $8,800, an increase from $8,550. Additionally, individuals aged 55 and older can make a $1,000 catch-up contribution, unchanged from previous years.
- Transit (TRN) Benefits: Employers can reimburse up to $350 per month for qualified parking and $350 per month for combined commuter highway vehicle transportation and transit passes, up from $325 in 2025. This supports employees' commuting expenses.
Simplify Benefits Administration with Catapult
Whether you’re introducing these plans for the first time or enhancing your existing offerings, now is an ideal time to:
- Reevaluate plan designs and contribution strategies
- Update employee communications and open enrollment materials
- Partner with your benefits administrator to align implementation and compliance
At Catapult, our Benefits Department specializes in helping employers implement and manage Consumer-Driven Accounts with a personal touch. From setup to compliance and employee support, we ensure a smooth process and help you maximize the value of your benefit programs.
Want to learn more about launching or fine-tuning your FSAs, HSAs, or commuter perks? Our benefits team can walk you through setup, compliance, and employee rollout. Connect with me at martha.barker@letscatapult.org or 704-944-6063.