Jul
11

Navigating the intricacies of Flexible Spending Accounts (FSAs) can be challenging for both employers and employees. Typically, there are three types of FSAs:

  1. Traditional Medical FSA
  2. Limited Purpose Medical FSA: For employees with a High Deductible Health Plan (HDHP) and an HSA, allowing them to set aside pretax funds for vision, dental, and orthodontia expenses.
  3. Dependent Care FSA: For employees who pay for eligible services such as preschools, summer day camps, or after-school programs.

According to SHRM’s 2023 Employee Benefits Survey, 62% of employers offered an FSA plan to their employees. Despite the popularity of FSAs, a recent report from the Employee Benefit Research Institute (EBRI) reveals a concerning trend: a significant increase in FSA forfeitures, with over 50% of Medical FSA participants leaving unused funds in their accounts by the end of 2022.