- Key insight: Discover how targeted communication and expanded eligibility increase FSA utilization and reduce forfeitures.
- Expert quote: Communicate across channels and include families, advises Joe Giordano, Health e-Commerce.
- Supporting data: Employees forfeited an estimated $4.5 billion in unused FSA funds in 2023.
- Source: Bullets generated by AI with editorial review
No one likes leaving money on the table, yet billions of
According to Money, employees lost out on an estimated $4.5 billion in unused FSA funds in 2023. As more products and services become eligible for FSA and
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Tips and tools for communication
FSAs can be great, but they come with a catch: The traditional deadline of December 31st, or grace period of March 15 to use funds, can sneak up on employees, who then see their pre-tax dollars disappear.
"Communicating about the FSA deadline as much as possible across as many employee channels as possible, whether that's a shared Teams or Slack channel, employee newsletters, company internet posts [and] if you're in an office, posters [in] any shared spaces," Giordano says. "Even sending information home, [because] FSAs cover not only the employee, but also their spouse and dependents."
Understanding what is covered by an FSA account is also a key part of usage success. Benefit leaders can create their own education resources, as well as pull together free options from Health e-Commerce, such as this
"We have the most comprehensive eligibility list on the web," Giordano says. "It includes not only products, but healthcare services as well. Employees can shop based on either their favorite brands, specific health condition, or even by how much money is left in their FSA."
Customizing communication can make it even more effective, since various demographics can have different health priorities, Giordano explains. For instance, let expecting or new parents know that many maternity and infant care expenses are covered, or tie eligible products into seasonal needs, he says.
Benefit leaders can also tie products and services to other offerings to raise awareness and engagement, and recommend ways a FSA can help bridge gaps in traditional health benefits, such as telehealth services or covering out-of-pocket expenses.
"Tying in what is FSA-eligible to what employees might be dealing with at this time of year could be step one," Giordano says. "New year's resolutions are a big thing [right now]. Employees may not know that certain telehealth services that promote weight loss are eligible. And if the employee has school-age kids or kids in college, that FSA can be used for everything from Band Aids to acne cream to braces to pain relievers to menstrual care products."
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How different generations use their FSA
Different generations may have varying priorities when it comes to their health and wellness, but they all value saving money. Here are some of the ways employees at Health e-Commerce use their FSA funds, offering a helpful glimpse into what others in each category might need, and how to construct targeted messages to them.
Nicole, Gen Z
"Throughout the year, I use my FSA towards out-of-pocket expenses, like copays. At the end of the calendar year, I put the majority of the funds towards a larger expense like an order of contact lenses [and] one of my go-to FSA purchases, Supergoop! Unseen sunscreen."
Kaley, millennial
"With two young kids, we have [a lot of] recurring and unexpected health expenses that come with having an active family: Everything from routine checkups and dental visits to urgent care trips, vision exams/care, and the occasional surprise ER visit or necessary procedure. We always use the full amount we contribute each year (sometimes even wish we could contribute more). The ability to access the full annual election on Day 1 of the plan year means we don't have to wait until we've built up savings in the account before covering costs. It gives us flexibility, predictability and real tax savings on the money we're already spending."
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Francel, millennial
"Having an FSA is perfect for our family because it makes it easier to manage those constant little health-related expenses, like kids' thermometers, bandages, sunscreen and cold medicine. It feels good knowing I'm using pre-tax dollars for things that keep us healthy year-round. I try to plan ahead and use my FSA funds evenly throughout the year on essentials like sunscreen and over-the-counter medications. Towards the end of the year, I'll use my funds on bigger ticket items, like the Dr. Dennis Gross face mask, to maximize my account."
Nicole, Gen X
"I use my FSA funds for copays at doctors' visits, prescriptions, OTC health needs and new eyeglasses. Don't try to save up your FSA funds, use them throughout the year, then whatever you have close to the deadline you can spend on something that isn't just necessary, but also feels like a splurge!"
Kathy, baby boomer
"I usually end up having to have dental work at some point in the year. If I have remaining money at the end of the year, I treat myself to some new prescription eyeglasses or prescription sunglasses. One of my favorite FSA purchases is the Caring Mill by Aura Infrared Sauna Blanket — it feels amazing and helps joints and muscles."
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