has embraced email in a big way. The reminders about appointments and online
confirmations are helpful and save phone tag. Today I received a Happy New Year
message offering to help make the best use of my dental benefits and reminding
me, “Don’t let another year of benefits slip through our fingers! If you have
an HSA or Flex account, you know what you don’t use, you lose!”
they are interested in my financial and dental well being. I don’t have access
to either an HSA (Health Savings Account) or Flex, (FSA, Flexible Spending
Account). I wish I did, but that’s another post. If I did have one of these
accounts the valuable information my dentist sent out would most likely be
Use It or Lose It?
designed to roll over from year to year. They are portable,individual participant
accounts governed by IRS rules much like a 401(k). When an employee is no longer
eligible to contribute or changes jobs they continue to have the ability to
draw from these funds for reimbursements, or allow the money to grow for future
use. Unlike a 401(k) participants are not subject to an age minimum for
not portable; employees cannot use the funds for new expenses after employment
ends. FSAs can be written with a grace period of up to 2.5 months into the new
plan year. So if a plan year ends on December 31st, participants can
continue to spend unused funds until March 15 of the next year. The dental patient
with $500 left in their account at the end of 2009 may have until
spend it, on dental work or any other qualified medical expense.
The “use it
or lose it” feature of FSAs can cause cautious employees to shy away from the
benefit. They lose potential tax savings and so do employers. Employers can overcome
reluctance and increase participation with clear explanations of advantages and publicity about grace
New Year, New Explanations
quarter of a new year, or the first few months of a new plan year, are the
perfect time to reconnect with employees about the benefits plan they selected.
If open enrollment for a new High Deductible Health Plan with an HSA was in
November an employee may never think about the information again until they get
the flu in February. Last year they just went to the doctor and paid a $20
copay or the visit. This year they have more decisions to make, in-network, use
the HSA or pay out of pocket?
until frustrated employees receive bills they don’t understand. Make a first
quarter effort to provide specific explanations for how to access new benefits.
The more examples the better, just don’t use real life scenarios. An email
describing how Lucy decided to pay out of pocket for psoriasis treatment that
concludes, “It’s not contagious” is a poor employee relations move, and a
violation of medical privacy rules.