Flexible Spending Accounts (FSAs)
Both the employer and employee can contribute to flexible spending accounts. Until HRAs and HSAs were introduced, FSAs offered employees the only way to supplement their employer-sponsored health plan on a pretax basis. While HSAs and HRAs have become increasingly popular, FSAs are still a very viable option for employers of every size and are compatible with virtually any health plan.
- Many employers have used FSAs to help employees fund higher out-of-pocket expenses after increasing health plan deductibles and co-payments.
- Employees can use an FSA to pay for a variety of health care expenses not covered by their health plan. These often include over-the-counter drugs, vision, or dental expenses.
- FSAs can also be set up to pay for qualified dependent care expenses.
- Employers can continue to offer an FSA in combination with an HRA and, in a modified form, with an HSA. ACS can provide further details on these options.
Use It or Lose It Rule
The funds deposited into an FSA cannot be rolled over from year to year but must be used within a plan year. However, under new Internal Revenue Code provisions, an employer may allow an additional 75 days after the end of the plan year for employees to use the funds in their accounts.
ACS has more than 20 years of experience with FSA design and administration. We can coordinate claim submissions to make your health plan an even more attractive benefit to employees.
For more information, or to request a quote, click to contact the ACS Sales Team.