what if I choose to filter the rest through a 529 plan?
Then you pay taxes on the employer contributions/reimbursements that exceed $5,250.
"can I apply 529 savings to student loans in future years,"
Nope. But a few things to keep in mind here.
529 funds can be used for the qualified education expenses of tuition, books and lab fees. Those funds can also be used for room and board ***IF*** the room and board is in *direct support* of the education. So if you own your home or are renting in the same locale where you work, then the housing costs is not in direct support of the education. In other words, you have no clear intent to no longer live there once the education ends.
Do keep in mind too, that the administrator of the 529 account can change the beneficiary of that account too. So for example if you leave the 529 funds alone and later have kids that will be attending college, you (if you're the administrator of the account) can change the beneficiary accordingly at any time.
Now for the employer reimbursement, the taxability of the amount over $5,250 will be offset by the *qualified* education expenses they are used for. Generally it doesn't matter if the employer pays the money to you and then you pay it to the school, or if the employer pays it to the school directly, on your behalf. Either way, the amount over $5,250 gets included in box 1 of your W-2.
Also be aware that the "tuition and fees" deduction expired at the end of 2017. So while out of pocket expenses are no longer deductible, it will qualify you for a number of education credits such as the American Opportunity Credit or Lifetime Learning Credit.
