After what feels like the longest spring break ever, students are finally filling up their backpacks for “in-person” school or pulling up a chair to the family dining table and logging on for virtual school.
It’s a good time to remind employees about their back-to-school purchasing options if they have flexible spending accounts (FSAs), health savings accounts (HSAs) or health reimbursement accounts (HRAs).
Particularly as the FSA clock begins winding down to December, it’s important to make sure employees know how to spend their funds.
Consumer directed healthcare account holders can ensure their medicine cabinets are ready for the fall. They’ll need first aid coverage for everything from home recess “ouchies” to immune system support and virus protection.
Here are some eligible item categories* that might be a good fit for a back-to-school list:
In addition to ensuring employees USE their tax-advantaged accounts and providing them with good communications about HOW to do that, be sure to brush up on some COVID changes to FSAs as well.
Employers may make plan changes to allow employees to change their election for 2020 for both healthcare FSAs and dependent care FSAs. Because of employment shifts or fluctuation in dependent care options during the pandemic, employees may need to adjust their election to prevent forfeiting funds. Additionally, the IRS raised the annual carryover limit from $500 to $550 to ease forfeiture rates. Refer to this IRS notice for details. Consult with your vendor or counsel to determine what plan amendments may need to be enacted.
Finally, the CARES Act, passed in March 2020, provides two additional categories of eligible expenses retroactive to January 2020. Items purchased in these categories in 2020 can be reimbursed and/or covered with funds from an FSA, HSA or 213(d) HRA. Account holders may now purchase over-the-counter products and medications without a prescription as well as menstrual care products. More details about these COVID-related changes are here. These new categories of eligible expenses are permanent additions to the IRS’ eligible expense list.
Connecting employees with spending and savings accounts to practical items they might need is a great way to boost utilization. Also, communicating about their accounts throughout the year, rather than just at annual enrollment, is likely to boost their understanding and perception of these valuable benefits. To learn more about offering and optimizing FSAs, check out our e-book, To Contribute or Not To Contribute: Getting Employees to take Advantage of healthcare FSAs.
*account holders are responsible for verifying eligibility of any item purchased or purchasing eligible items from an IIAS-compliant retailer.
BONUS: Offer your employees a discount on us! All items are eligible.