- A large percentage of companies have an opportunity to upgrade one of their best employee benefits: the health care flexible spending accounts (FSA), according to the San Antonio Express News.
- With a flexible spending account, workers can set aside a certain amount of pretax earnings each year, up to $2,550 in 2015, for medical and dental expenses not covered by their employers’ health care benefits plan.
- The money is tax-deductible. For example, if a worker is in a 36% federal income tax bracket, the worker can save $918 a year if he sets aside and spends $2,550 in unreimbursed medical expenses.
In October 2013, under a federal new rule, employers could allow participating employees to roll over as much as $500 a year rather than lose it. That’s a significant cushion that should alleviate many fears about setting up flexible spending accounts. It also should boost participation and help employees save hundreds of dollars. But employers, by and large, are not making the switch, according to the Express News. Why not?
“Primary reasons would be, one, lack of understanding about the benefits of the rollover vs. grace period, and two, lack of focus on promoting rollover to employer groups, and in some cases, three, the inertia of changing plans,” Steve Auerbach, CEO at Alegeus Technologies, told the Expresss News.
He said that he’s known of companies that have educated workers about the rollover rule change and seen enrollments rise by more than 50 percent. “The results demonstrate that this was effective,” he said.