Participant Eligibility
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With few exceptions, almost all employees can participate in Flexible Benefit Plans. Exceptions include partners in a business, members of LLCs, and shareholders who own 2% or more in S-corporations. Only employees may participate in a Healthcare FSA or Dependent Care FSA.

Domestic partners are eligible to use an employee's FSA only if the domestic partner is also a dependent under IRS Code 152. Domestic partners that do not qualify as dependents are not eligible for an employee's FSA reimbursements.

FSAs cannot discriminate in favor of highly compensated employees. Annual nondiscrimination testing is required with FSAs to insure that the employer meets participant eligibility requirements. Sterling offers nondiscrimination testing annually for compliance.