Money Matters: FSA Deadline Approaching

 The December 31 use-it-or-lose-it deadline is back this year for many consumers who are enrolled in flexible spending accounts (FSAs). A recent survey by Health-E Commerce suggests that approximately 67% of those individuals are either not aware of COVID-inspired deadline changes that could leave them at risk of forfeiting more unused FSA dollars than ever, or that they could use a reminder about changes impacting their 2021 and 2022 deadlines. The parent brand to FSA Store, the first and largest online marketplace that exclusively sells FSA-eligible products, Health-E Commerce hopes to minimize forfeitures and is urging the more than 30 million Americans who are enrolled in FSAs to check their balance and deadlines to avoid losing tax-free healthcare dollars.

“Health-E Commerce data suggests that over $1 billion in FSA dollars may have been forfeited in prior years and 2022 forfeitures could be higher if account holders do not know their balance and what their deadline options are. In fact, our survey data shows that FSA balances are 46% higher this year than in 2021 at this time,” said Preston Farrington, CEO of Health-E Commerce. “To avoid losing funds, consumers should ask their FSA administrator or their human resources team about their deadline and check their balance. There is still time to spend down FSA dollars on everyday wellness items or to schedule medical, dental, and vision appointments, but account holders need to be in the know now.”

2 things to know about the FSA use-it-or-lose-it deadline

• The FSA deadline extensions enacted during the pandemic expire this year, which means the December 31 deadline – the date by which most whose health benefits run on a calendar year must spend FSA funds to avoid forfeiture – is back in play.
• Temporary increases to the FSA carryover limits that were introduced during COVID are expiring, which means that $570 is the maximum amount an account holder with a carryover option is allowed to roll over into 2023, and anything over that amount will be forfeited. Not all FSAs have a carryover option. Check with your FSA administrator or human resources team to confirm your plan details.

“Account holders who had the luxury of rolling over all remaining FSA dollars for the past two years will need to spend those dollars before December 31,” said Farrington. “Fortunately, there are many ways to spend FSA dollars to support everyday health and wellbeing. If you need shopping inspiration, FSAstore.com offers the industry’s most comprehensive eligibility list. While you’re on the site, you can also sign up for our deadline alerts to ensure you never lose FSA dollars to a missed deadline.”

An FSA covers a wide variety of eligible expenses, including everyday health and wellness products and clinical services. In addition to reducing taxable income by funding an FSA, when using tax-free FSA dollars on healthcare needs, individuals can save up to an estimated 30% on eligible expenses (based on individual federal and state tax brackets).

To learn more, visit FSAstore.com, and take advantage of the FSA Learning Center. With easy-to-use tools that help account holders project tax savings and map out healthcare spending needs, receive reminders about their personal deadline, and quickly and easily shop for the latest FSA-eligible products, FSAstore.com helps account holders become savvy healthcare consumers and avoid losing FSA funds.

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About Health-E Commerce

Health-E Commerce is the parent brand to FSA Store, HSA Store and WellDeservedHealth, a family of online marketplaces that serve the 70+ million consumers enrolled in pre-tax health and wellness accounts. The company also created Caring Mill, a popular private-label line of health products that benefits Children’s Health Fund and enables customers to make a donation with each purchase. Since 2010, the Health-E Commerce brands have led the direct-to-consumer e-commerce market for exclusively pre-tax health and wellness benefits. Health-E Commerce plays an essential role in expanding product eligibility for important new categories within the list of eligible medical expenses.