Health-E Commerce debunks Flexible Spending Account (FSA) myths in preparation for December 31 use-it-or-lose-it deadline

As confusion and uncertainty about FSA changes remains high, FSA Store is clearing up common misconceptions that may cause consumers to forfeit funds

NEW YORK, Sept. 26, 2022 /PRNewswire-PRWeb/ -- More than 30 million Americans are enrolled in flexible spending accounts (FSAs), but most are not aware of what their spending deadline is or how to use these tax-advantaged funds. As employers across the country are conducting open enrollment meetings for 2023 health benefits, now is the perfect time to educate individuals and families about FSAs and to debunk some common myths that may cause consumers to miss out on the tax advantages of enrolling in an FSA or ? worse yet ? lose their hard-earned healthcare dollars to a missed deadline.

Health-E Commerce, parent brand to FSAstore.com, the first and leading online marketplace that sells exclusively FSA-eligible products, is on a mission to educate account holders about these myths so they can use, not lose, their FSA funds before the December 31 deadline.

"Many consumers ? and even many employers ? do not realize that the COVID-inspired FSA extensions expire in December, which makes it critical this year for account holders to understand what their deadline is, how much they have remaining in their accounts, and if they have a rollover or grace period option," said Preston Farrington, CEO of Health-E Commerce. "By dispelling these myths and educating consumers about FSA rules, our team at Health-E Commerce is helping consumers get the most out of their tax-free healthcare dollars."

4 FSA myth busters to help consumers make smart money moves

• Myth #1: The COVID rule changes got rid of the FSA use-it-or-lose-it deadline.
• Fact: FSA deadline extensions introduced during COVID were temporary, and not all employers adopted those options. In addition, the FSA deadline extension expires this year, which means the December 31 deadline ? the date by which most whose health benefits run on a calendar year must spend FSA funds to avoid forfeiture ? is back in play this year. For consumers who have a December 31, 2022 spending deadline and an FSA grace period, March 15, 2023 is the last chance to spend remaining 2022 FSA funds. For consumers who had the extended grace period offered for their 2021 FSA plan year, you may have until December 31, 2022 to spend down remaining 2021 FSA dollars.

• Myth #2: It doesn't matter if I miss the December 31 deadline, because all FSAs now have a rollover.
• Fact: Only some FSAs have a rollover or carryover of funds. On top of that, temporary increases to the FSA carryover limits that were introduced during COVID are expiring, which means that $570 is the maximum amount an account holder with a carryover option is allowed to roll over into 2023, and anything over that amount will be forfeited. Account holders who had the luxury of rolling over all remaining FSA dollars for the past two years may have more money than ever remaining in their FSAs to spend before the deadline this year.

• Myth #3: I can only use my FSA for a limited number of expenses, like vision and dental care.
• Fact: While an employer can offer a limited-purpose FSA for vision and dental, the more common general medical FSA typically covers a wide variety of eligible expenses, including everyday health and wellness products and clinical services. FSA Store offers the industry's most comprehensive eligibility list, with thousands of eligible products and services.

• Myth #4: It doesn't pay to enroll in an FSA if I'm just going to lose my money.
• Fact: Contributing to an FSA allows consumers to reduce their taxable income, which is always a smart money move. In fact, by contributing tax-free FSA funds toward healthcare needs, individuals can save an estimated 30% (based on individual federal and state tax brackets). This is more important than ever as persistent inflation is driving up costs for nearly all goods and services. Plus, with easy-to-use tools that help account holders project tax savings and map out healthcare spending needs, receive reminders about their personal deadline, and quickly and easily shop for the latest FSA-eligible products, FSAstore.com helps account holders become savvy healthcare consumers and avoid losing FSA funds.

Health-E Commerce data suggests that over $1 billion in FSA dollars could have been forfeited in prior years and is dedicated to helping to ensure that never happens again. To mitigate potential forfeitures, Health-E Commerce is urging FSA users to check with their account administrator to understand if their employer offered any of these extensions and, if so, how much money they have remaining in their FSA from the 2021 and 2022 plan years to get the full picture of what they must spend by December 31. To learn more, visit FSAstore.com, and take advantage of the FSA Learning Center.

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About Health-E Commerce
Health-E Commerce is the parent brand to FSA Store, HSAStore and WellDeservedHealth, a family of online marketplaces that serve the 70+ million consumers enrolled in pre-tax health and wellness accounts. The company also created Caring Mill, a popular private-label line of health products that benefits Children's Health Fund and enables customers to make a donation with each purchase. Since 2010, the Health-E Commerce brands have led the direct-to-consumer e-commerce market for exclusively pre-tax health and wellness benefits. Health-E Commerce plays an essential role in expanding product eligibility for important new categories within the list of eligible medical expenses.

Media Contact

Barbara Tabor, Health-E Commerce, 651-230-9192, [email protected]

SOURCE Health-E Commerce