Around 30 million Americans are enrolled in Flexible Spending Accounts. A 2010 Mercer survey revealed that 37% of employees that were offered FSAs opted into one, and on average participants contributed $1,420.
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Another problem that persistently arises is confusion over product eligibility. Many plan participants do not know the breadth of medical products available to them under an FSA ranging from sunscreen to blood pressure monitors and even breast pumps. Stockpiling of products to escape forfeiture of FSA funds (countless boxes of band aids, eyeglasses) will not count as a qualified expense, and more importantly, does not to benefit participants.
FSA usage should be encouraged throughout the year. Budgeting is easy when using an FSA calculator before opting into the plan to help participants estimate their yearly expenses.
Your role when communicating to clients about better FSA budgeting should entail having multiple communications throughout the year. These communications might highlight which services qualify for FSA reimbursement, which products can be purchased with an FSA card, or how other expenses such as dependent care FSAs come into play. Sitting down with clients one-on-one will provide the chance to explain benefits management so that the client feels more in control. Ultimately, communications focused on explaining the multifaceted ways in which an FSA can be applied will also generate a deeper understanding of these tax-advantaged accounts.
Miller is the founder and president of FSAstore.com, an e-commerce site exclusively focused on Flexible Spending Account products and services. He graduated with a B.S. in Business Administration from U.C. Berkeley and received his MBA from Columbia Business School. He can be contacted at
