A flexible spending account (FSA) is a great way for your employees to save money on health expenses. As an employer, you also save money on FICA taxes for each employee who contributes to an FSA.
Despite the savings and peace of mind FSAs can provide, some employees are hesitant to enroll because of:
- Uncertainty around which expenses are eligible
- The use-it-or-lose-it rule
- Concerns of not being able to afford another payroll deduction
If enrollment in your FSA plan is low, here are five benefits you can share with your employees to move the needle.
With this feature, your employees can roll over up to $550 of unused funds to the next plan year. This can provide peace of mind for those who have concerns about losing money. If you don’t currently offer a roll over, talk to Ameriflex about adding it to your plan.
- Funds Available Day One
With an FSA, employees do not have to wait to accrue their funds. The entire contribution is available on the first day of the plan year. This is especially helpful for individuals who may have medical expenses toward the beginning of the year.
- Pre-Tax Savings
Every dollar an employee contributes to their FSA lowers their taxable income. That means if they earn $40,000 a year and contribute $2,750 to an FSA, only $37,250 of their income is subject to tax. That’s an average savings of over $800 per year, depending on their tax situation.
- Eligible Expenses
There are hundreds of FSA-eligible products and services, such as prescriptions, over-the-counter medicine, feminine care products, glasses, contacts, LASIK, dental care, braces, copays for doctor office visits, and more. Employees can also use their Ameriflex Debit Mastercard® at the FSA Store. It’s an online shop stocked exclusively with FSA-eligible expenses.
- Complimentary ID Theft Protection
All Ameriflex cardholders get complimentary ID Theft Protection, courtesy of Mastercard®. It only takes a few minutes to register and gives your employees access to emergency wallet replacements, ID theft alerts, expert resolution services, and credit monitoring.
To learn more about the benefits of FSAs, check out our Ultimate FSA Guide.