5 ways to help employees maximize FSA dollars
March 9, 2016 12:13 PM
5 ways to help employees maximize FSA dollars
If your employer-sponsored Flexible Spending Account (FSA) has a grace period, your employees have an extra two-and-a-half months (until March 15 for plans that ended Dec. 31) to spend FSA dollars from 2015. That’s good news, but did you know that many employees do not understand or know about the deadline? Research shows employers could be doing more to educate them; here are five tips from FSAstore.com that you can use to help employees understand and maximize their FSA.
Know what’s eligible.
Smartphone-enabled blood pressure monitors and home defibrillators are eligible FSA expenses, but what about baby monitors or medical tapes? There are more than 4,000 FSA-eligible products, and that list has grown and changed over time. Avoid keeping print copies of an outdated list and refer employees to online eligibility lists such as the comprehensive FSA eligibility list .
And what isn’t eligible.
Not all products at your local drug store are FSA eligible expenses, but chances are the sales clerk or pharmacist won’t know that. Common products that aren’t eligible include electronic toothbrushes, cosmetics, weight loss products and fitness trackers. Over-the counter medications including Tylenol or Advil are eligible, however, with a prescription.
Get everyday healthcare items.
Employees can spend down their FSA quickly by purchasing everyday things like broad spectrum, SPF 15+ sunscreen protection or contacts and contact lens solution. This may not make for exciting purchases, but it beats forfeiting unused dollars. And, why not use pre-tax money on medical essentials that you’ll purchase anyway? Employees also may not realize they can use their FSA to pay for expenses for their adult children (through the age of 26). Parents can even get an FSA debit card for dependents, so if they have a child in college, they can ensure they stay healthy while away at school.
Plan ahead.
Remind employees to think ahead and buy products for the coming months (think spring break trips or summer vacations). But beware! Buying too much of one product at once may be considered “stockpiling,” which is not allowed. Employees can also benefit from shopping for bundles of similarly themed products (i.e., baby care, pain relief, adventure travel) available at FSAstore.com.
Use your FSA debit card.
Help your employees save time and paperwork by offering an FSA debit card and encouraging them to use their debit card when spending FSA dollars. When employees use their debit card, money is taken directly out of the FSA, eliminating the need to file a paper claim and wait for reimbursement. FSA debit cards can be used to pay for all things medical such as co-pays, coinsurance and deductibles, as well as vision, dental and over-the-counter medical items, too.
