A medical 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 employers 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 they’re concerned about the plan’s use-or-lose rule. So what can you do to increase FSA 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 employees carry up to $550 of their FSA 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 FSA funds.
The Consolidated Appropriations Act, 2021, has also provided additional temporary flexibility to FSA carryovers and grace periods.
Simplify spending and reimbursement
Participants want fast reimbursement of FSA claims. Technology and automation can give them that. A few examples of how we simplify FSA spending and reimbursement are:
- The WEX benefits card, which is the only card our participants need to spend funds from their WEX benefits plans. Your WEX benefits debit card makes it easy to spend your funds on eligible expenses. When used at an IIAS merchant, they can simply swipe their card and it will automatically approve anything that’s an eligible expense.
- Eligible expense scanner within our benefits mobile app. Participants can simply scan an item’s bar code with the eligible expense scanner to determine its eligibility.
- EOB Smart Scan, which uses artificial intelligence (AI) to scan a participant’s Explanation of Benefits (EOB) and auto-fill necessary information.
Knowledge is power! Empower your employees with helpful resources that answer many of their lingering questions, including our blog, benefits toolkit, and knowledgebase of FSA-related videos and educational materials.
Spark FSA participation activity
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.
Would you like to learn more about FSAs? Watch our Benefits Buzz episode below.