America's Benefit Specialist November 2022

DEBUNKING FSA MYTHS IN PREPARATION FOR THE USE IT-OR-LOSE-IT DEADLINE

Courtesy of Health-E Commerce New York, New York www.health-ecommerce.com More than 30 million Americans are en rolled in Flexible Spending Accounts, but most are not aware of what their spending deadline is or how to use these tax-ad vantaged 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. “Many consumers—and even many em ployers—do not realize that the COVID-in spired FSA extensions expire in December, which makes it critical this year for account holders to understand what their deadline

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 dead line and an FSA grace period, March 15, 2023 is the last chance to spend remaining 2022 FSA funds. Consumers who had the extended grace period offered for their 2021 FSA plan year may have until December 31, 2022, to spend down their 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

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 is helping consumers get the most out of their tax-free healthcare dollars.” FOUR 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 ad dition, the FSA deadline extension expires this year, which means the December 31

TEMPORARY INCREASES TO THE FSA CARRYOVER LIMITS THAT WERE INTRODUCED DURING COVID ARE EXPIRING.

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