A Flexible Spending Account (FSA) is a great way for employees to save pre-tax dollars for medical expenses. It’s also a great way for you to save on FICA taxes! But sometimes employees are reluctant to enroll in an FSA due to unfamiliarity with what qualifies as eligible expenses or the plan’s use-it-or-lose-it rule.
When it comes to IRS rules, we work to keep our clients and participants in-the-know by continually providing timely tips, such as how participants can spend their remaining FSA dollars, and sharing platforms that make substantiation easy! So what can you do to increase participation among your employees? Here are a few helpful hints:
Provide safety nets
Adding a carryover or grace period to your Flexible Spending Account offering reduces the year-end risk for your employees. Here’s how they work:
- An FSA carryover lets your employees carry up to $500 of their dollars into the next year.
- An FSA grace period lets them incur services for up to an additional 2½ months past the plan end date, giving them more time to spend their funds.
Knowledge is power! Empower your employees with helpful resources that answer many of their lingering questions, including our blog and a resource center with related videos and educational materials. Does someone want to learn more about filing a claim? We have a handy infographic. What about submitting documentation for purchases made with our debit card? Watch our video.
Strengthen your employees’ benefits habits by providing quarterly reminders for them to check their account balances and use their funds. As you get close to the end of the plan year, increase the frequency of those notifications. Remind them of any carryover or grace period you offer and that any unused funds remaining at the end of the plan year will be forfeited.
Make sure they know how easy it is to use pre-tax benefits with us, too. Do your employees know that they need only one mobile app for all of their benefits? And, through our app, they can check their balances, upload pictures of documentation or submit a claim. This video shows how easy it is to use.
We've put together a few facts about our Flexible Spending Accounts below.
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