Use enrollment season to educate about flexible spending accounts (FSAs)

Flexible spending accounts (FSAs) continue to garner significant interest and questions from employees during open enrollment. But open enrollment doesn’t have to be complicated. The following tips can help employers to educate their workforce about the benefits of these tax-advantaged accounts.

Tips for Employers

Last year, the U.S. Treasury Department and IRS made some favorable changes to FSAs by altering the long-standing “use it or lose it” rule, allowing employers to offer a carryover of up to $500 in unused FSA funds to the following year or to continue a grace period option giving a two-and-a-half month extension to spend remaining FSA funds. FSAs cannot have both a carryover and a grace period option, and employers are not obligated to offer either extension.

Employers should consider their options:

Tips for Employees

Open enrollment communications are an opportunity to provide employees with the following pointers on FSA use:

In addition, here are some ways for employees to use their accounts that they may not be aware of:

Source: SHRM