How do you define a Flexible Spending Account (FSA) in Workday?

A Flexible Spending Account (FSA) in Workday is defined primarily through the specification of contribution limits and eligible expenses within the benefit plan setup. This definition is crucial because it outlines how much employees can contribute to the FSA and what types of expenses can be reimbursed using the funds from the account.

When setting up an FSA, it is essential to establish these parameters to ensure compliance with regulations and to provide clear guidance to employees regarding their options and the proper use of their FSA funds. This setup not only affects employee participation but also impacts the overall administration of the FSA within the organization's benefits offerings.

While identifying eligible employees, consulting IRS guidelines, and requiring employee applications may also be necessary steps in the broader context of FSA administration, they do not define the structure of the FSA itself. The focus on contribution limits and eligible expenses is central to establishing the account's functionality and compliance with applicable regulations.