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Masks and PPE? What’s in Store for Consumer Accounts for 2021?

Masks and PPE? What’s in Store for Consumer Accounts for 2021?
Posted on Wednesday, February 10, 2021 by Kent Rausch
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In addition to mounting concerns about physical and mental wellness in the pandemic, there is growing evidence that the financial well-being of many Americans continues to be at risk.

updates-on-consumer-accounts-2021

According to a 2020 Bank of America study, the number of employees who rate their financial wellness as ‘good’ or ‘excellent’ is declining, from 61% in 2018 down to 49% in 2020. Add that to the unemployment rate of 6.7% reported in January 2021, which is more than double the rate from February 2020, and there is a pending need to consider every aspect of the financial wellness strategy to provide employee support.

Seemingly, more employers than ever are finding this part of their benefits strategy to be important, as the Bank of America study showed that there was a more than 3.5x increase among employers who felt great responsibility regarding financial wellness from 2013 – 2020. Also, 80% of those employers believe that employee financial wellness delivers more loyal employees, greater productivity, higher satisfaction and more engaged employees.

Providing a consumer accounts program or boosting your communications strategy around it can be a win-win for your organization’s bottom line and morale while providing greater financial support for employees. While it may be a challenge to educate employees on the value of the tax-free health and benefits accounts, it’s worth the effort for both health and dependent care resources.

Last week we took a quick tour through all of the regulatory changes regarding consumer accounts in 2020. Today we’ll gaze into the benefits crystal ball to see what might be on the horizon.

Looking Ahead

We expect that enrollment and interest in consumer accounts to grow, as employees are looking to cover themselves and their dependents for current issues or for future savings. Particularly if employers take advantage of the extension and carry over increase for both healthcare FSAs and dependent care FSAs, employees will have less risk aversion to forfeiting their funds at year-end.

Additionally, the HDHP and HSA provisions provided last year should provide some peace of mind for employees who have the option to choose the high deductible plan. Enrollment in HSA-eligible plans and HRAs reached a record high in 2020, with 19% enrolled. Communicating the value and stability of these benefits for employees can ease their fears about financial risk.

When we asked our members about how they would feel about a large ER bill, only 10% said they were prepared, and 47% reported they’d “feel panicked.” That represents a lot of employees who may feel financially insecure (2020).

Rachel Rouleau, VP of Compliance for the FSA Store.com says, “Efforts to stay healthy at home have become top of mind for most people. And with more flexibility than ever for FSAs and continued flexibility for HSAs, many people are relying even more on these important benefits to cover their expenses this year. Instead of seeking in-person care, people are turning to expanding options in telemedicine and home health products to meet many of their health needs. We have seen this first-hand at FSA Store, where consumers have been leaning on FSA/HSA-eligible virus preparedness products, such as thermometers, over-the-counter medicines and other diagnostic products to try to prioritize their health.”

Commuter benefits remain on the back burner as many office workers are not back to the day-to-day commute. As of December 2020, 41.8% of the American workforce continues to work remotely. An estimated 26.7% will still be working from home through 2021. This is an 87% increase from the number of remote workers prior to the pandemic!” (Upwork)

Legislation to Watch

Finally, there are two bills in the U.S. Congress now that could affect eligible expenses in the near future.

Rouleau states, “We are hopeful that Congress will continue to focus on FSA/HSA eligibility expansion where it makes sense, and we are committed to trying to help make that happen. In January, Representatives John Curtis (R-UT), Ami Bera, M.D. (D-CA) and Jeff Van Drew (R-NJ) introduced H.R. 373, bipartisan legislation which would allow FSA and HSA holders to use their funds on CDC recommended face masks and hand sanitizers, products which we believe should be eligible for consumers as the COVID-19 pandemic continues,” she says. The timing of eligibility will be tied to the state of emergency for the COVID-19 health crisis. Interested individuals can sign a petition here to show support of this initiative.

The second bill was introduced in the Senate Finance Committee (S. 4463) and would expand the types of vitamins and supplement products allowed as eligible expenses. While this bill might not get airtime immediately, it does signal that legislators are listening to providers and consumers about consumer accounts use.

Rouleau and her team track pertinent legislation, particularly for the standard IRC 213(d) eligible expenses. She outlines additional considerations about FSA and HSA legislation on the FSA Store blog.

Per usual, we can expect HSA limits to be announced in May and FSA, Commuter and Adoption maximums to be announced in November (right after peak annual enrollment season).

We’re here to help you stay on the forefront of consumer accounts activity. For more information on Businessolver’s proprietary and integrated consumer accounts administration, check out our guide to selecting your best-fit partner. Or, for more information on how to support your employees with consumer directed accounts, click below. 

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