The words "election" and "deduction" are related to behaviors for contributing funds into your pre-tax benefits.

Election

During open enrollment, you "elect" to contribute a certain amount of money from your paycheck to your benefit during the benefit's plan year. 

This amount of money is your "election". 

Some benefits allow you to change this election throughout the course of the year, while others will only allow you to reset your election after open enrollment due to a qualifying life event. 

Your company's HR team can provide more information about changing your election. 

Deduction

During the plan year, your employer takes out, or "deducts", a certain amount of money to contribute to your benefit from your paycheck.

Each amount of money removed is a "deduction". 

By the end of the plan year, your deductions will sum to equal the amount your election amount.

FAQ

What tax impact does this have?

Deductions are made from your gross wages, so they reduce your overall taxable income. 

What's an example of how this works?

If you enroll in a Flexible Spending Account (FSA) during open enrollment, make an election of $1200, and are paid-semi monthly (i.e. 24 paychecks) you can expect to have a $50 deduction for each pay period ($1200/24).

Questions? We are happy to help! Please reach out to Benepass Support for any assistance.