As the end of the year approaches, there is a lot on your employee’s minds. Everything from holiday preparations and year-end work duties, to planning out some resolutions for the new year ahead of them. Whether or not they have remaining HSA and FSA funds remaining in their accounts may not be at the forefront of their minds. Employers can help their employees on the company medical plan by reminding them not to let their health and finances fall to the wayside. While HSA and FSA provide tax-advantaged savings on an employee’s medical expenses throughout the year, they come with a unique twist: any unspent balances typically don't carry over into the following year. It is important to provide your employees with these reminders and emphasize the importance of reviewing and utilizing any remaining funds before the year comes to a close.
The Difference Between an HSA and an FSA
An employee needs to know what kind of accounts they have working alongside their medical plan, as each account has a unique list of purchases that qualify under them. Let’s look at some of the differences between HSA and FSA accounts.
Review Account Balances
An employee may not be aware of just how much or little funding their accounts have remaining in them at the end of the year. An employee may want to make different decisions about their health depending on the amount remaining in the account. Luckily, many HSA and FSA providers have online portals or mobile apps where account holders can access their account information to review their current balances.
Understand The Plan
Rules regarding carry-over balances are unique to each employer and benefit plan. This is why it is so important to understand company and plan-specific HSA or FSA plan details.
Plan Medical Expenses
Once an employee is informed about the unique details of their plan and accounts, they can plan how to spend their remaining funds. Some strategies that employees can use are:
Keep Receipts and Documentation
It's important to keep any documentation of an employee’s expenses made with account funds throughout the year, including receipts and invoices. These documents can serve as support or evidence in the event they need to substantiate any claims or verify any expenses.
Use Account Tools
Employers are often able to provide various tools and resources to help their employees manage and understand their HSA and FSA accounts. These tools can include things such as online calculators, mobile apps, and customer service hotline lists. Reminding employees of these tools and resources can help them better manage their accounts
Communicate With The Benefits Team
If an employee is uncertain about various aspects of their HSA or FSA, the employer should advise them to reach out to their HR department or benefits team. These teams are well-versed in the company benefit plan specifics and can clarify any questions an employee may have to help them make the most of their benefits.
It is important that employees take the time to understand their plans and review their account balances so that they can strategically plan their medical expenses throughout the year. As an employer, you can support your employee’s financial and wellness goals by reminding them of these things as the end of the year gets closer.
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