From the moment you see the anticipated extra blue line or plus sign or get the call about an adoption or surrogacy match, there is a lot to think about for both new moms and new dads.
Many employees with access to a spending account, such as an FSA, HSA, or health reimbursement account (HRA), don’t realize that those benefits can really pay off at this stage of life, too.
First things first, it’s time to take care of the mom-to-be and the long journey she has ahead of her. Pregnancy brings a variety of health costs, but the real fun begins when you finally get to bring baby home.
With so much on the mind, parents may forget how much can be covered with their spending accounts. Standard vitamins require a letter of medical necessity, but prenatal vitamins are an eligible item. So don’t forget to purchase those pre- and post-natal essentials for mama.
There are lots of maternity and postpartum products on the eligible items list, including:
Having these items at the ready will make for an easier transition before and after baby comes. Once the baby arrives, there are a number of essentials that employees might not think of as eligible, but they can save 25-30% of the total cost by using their pre-tax account.
Those savings can really add up if parents want to invest in the gadgets and healthcare items available:
Get the diaper bag ready to roll with more eligible items:
Maybe, this isn’t the first child added to the family, and it never hurts to encourage employees to use their spending accounts to make sure they’re ready for those middle of the night fevers, knee scrapes, and runny noses.
With the 2020 CARES Act, over-the-counter medicines and remedies are now on the eligible items list. Parents need to keep a stash of these necessities not just at home, but also on the go.
FSA and HSA funds can refill your first aid kit:
As we pause to celebrate our moms this weekend and dads next month, make sure everyone is prepared for the big event of welcoming a new person to the world with their consumer-directed healthcare account.
Highlighting these kinds of items throughout the year to employees in various stages of life can also be an effective way to drive awareness and enrollment in spending accounts for greater financial wellness.
|Item||Without FSA||With FSA|
|Post-partum recovery kit||$53.00||$41.34|
|Camera baby monitor||$250.00||$195.00|
|Diaper rash ointment||$20.00||$15.60|
|Gas relief drops||$14.00||$10.92|
|First aid kit||$70.00||$54.60|
|Miscellaneous nursing supplies||$100.00||$78.00|
|Pain relievers (OTC)||$30.00||$23.40|
|Savings using FSA pre-tax funds||$289.74|
Here’s a side-by-side comparison you can use to show the savings employees can get when they enroll and contribute to an HSA or FSA. We use the FSA to track baby spending here and assume a 22% tax rate (average tax rates range from 12% – 35%, depending on whether filing singly or jointly). Above items selected from the FSAStore.com. Every item is eligible there, and there’s a great section for “Mom & Baby.”
Most employees can save up to 30%, with a combination of savings from federal, state, and FICA payroll taxes. We are estimating on the lower end of tax-savings. Calculate your estimated savings and contribution amounts with our FSA calculator.
For parents, costs can quickly pile up from adoption fees or doctor visits and every penny counts. That’s when it’s nice to know employees can rely on their pre-tax spending accounts.