Help your employees find savings—FSA is the way
Thursday November 17th, 2022
Estimated time to read: 1 minute, 30 seconds
It’s not your imagination—everything is getting more expensive. Sticker shock at everyday prices has become commonplace, but one of a household’s most necessary expenditures is growing exponentially more expensive: healthcare. In 2020, before prices began their meteoric rise, the average household spent approximately 9 percent on healthcare—even with employer-provided insurance. Put simply, employees are having a hard time covering healthcare costs.
As an employer, there’s a simple way to help employees protect themselves against rising healthcare costs—by offering an employer-sponsored flexible spending account (FSA) plan. With an FSA, employees can cover certain healthcare costs with pretax money. Money put toward an FSA is deducted from an employee’s salary before income taxes, saving employees money on taxes.
Additionally, offering an FSA can provide a competitive advantage in the struggle to attract and retain top talent. According to our Benefits Big Impact survey of 1,145 full-time employees, 82% of employees consider benefits part of their total compensation. Offering an FSA plan is a win-win.
With an abundance of options to pick from, finding the perfect health plan can be a challenging prospect for employees.
Here are a few ways to generate interest in your company’s FSA offering:
While many employees might be passingly familiar with an FSA option, they may not know enough to enroll. Explain that an FSA plan is ideal for those with regular or ongoing medical expenses. Additionally, employees may think FSAs are only applicable for copays or specialty visits. In fact, popular uses of FSA include dental care, fertility and pregnancy products, vision care, and much more.
Keep Employees Updated
In recent years, there have been some significant changes to how the IRS views FSA plans. Some changes, like allowing funds to roll over into the next calendar year, were temporary. Others, like making menstrual care products and certain drugs eligible for reimbursement, were made permanent. Keeping employees up to date with the latest changes will have them feeling knowledgeable and confident in their selection.
At the end of the day, every employee would like to get more out of their paycheck—and an FSA plan can help them accomplish it. Because employees contribute a predetermined amount of pretax money toward their FSA plan, they will likely pay less in taxes and maximize their take-home pay.
FSA plans not only help employees save—they also offer substantial benefits to employers. In the ongoing battle to find and retain talented people, offering the right healthcare option to the right employee can make a substantial difference. Additionally, there are ample tax advantages when it comes to FSA plans, as employers can save on FICA taxes.
Find out how isolved’s experts can help streamline your end-to-end benefit administration today!
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