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10 FSA Eligible Expenses Your Clients May Not Know About

Quick look: Though 2023 is more than halfway over, a majority of employees likely have FSA funds still waiting to be used. Individuals often don’t realize the extent of eligible medical expenses, which can limit what they think their health plan is really worth. Keeping clients informed of their options can guide everyone in realizing the true value of their benefits.

Flexible spending accounts (FSAs) offer employees pre-tax savings on certain medical expenses, many of which they aren’t aware of. In recent years, it’s been reported over 40% of employees with FSAs forfeited money, averaging approximately $400 per person in unused funds. 

With open enrollment season drawing near, it’s an optimal time to share examples with clients of where they can use their FSA dollars to avoid leaving money on the table. Here are 10 FSA expenses people may not know about and how working with a professional employer organization (PEO) partner gives you an advantage when curating optimal health plans.

  1. Summer essentials

With the heat wave raging on and insects still out in full effect, it’s a smart idea to replenish the stock. Fortunately, sunscreen with an SPF 30 or higher and insect repellent are both covered by FSA expenses. Saving on everyday items like this can minimize expenses, leaving funds for more pressing medical needs.

  1. Breast pumps

For new moms and moms-to-be, breast pumps are part of the approved expenses. Other related healthcare expenses on the list are breast milk storage bags and bottles, nursing pads, diaper rash cream, Pedialyte, nursing pads, and immunizations. Using pre-taxed dollars to stock up can help lower the overall costs of baby supplies.

  1. Massages

Some FSAs count massage therapy as part of their eligible expenses. Often, massages are viewed as more of a luxury rather than a necessary one. However, they can qualify when prescribed for pain management. Additionally, heating pads and over-the-counter medication used for pain relief are also accepted as FSA expenses. 

  1. Menstrual care products

Items including pads, tampons, period panties, and menstrual cups are all part of the approved list. Since this is a recurring expense, using funds from an FSA can save on monthly costs. Plus, if there are extra funds needed to be used quickly, these are a good choice as these products have a long shelf life and can be used in the months to follow.

  1. Over-the-counter medication

The expense of cold and allergy medication is quick to add up but can be paid for with tax-free dollars. Aspirin, Ibuprofen, flu shots, and COVID-19 tests, masks, and hand sanitizer are also FSA-eligible expenses. With the cold and flu season only a few months away, it’s a useful way to spend any available funds.

  1. Family planning healthcare

General family planning healthcare expenses, such as contraceptives, condoms, prenatal vitamins, and pregnancy tests, are all FSA-approved. Although procedures like tubal ligations, vasectomies, and vasectomy reversals are part of the list as well. 

  1. Dental and vision care

Many individuals may also not be aware supplemental benefits like dental and vision care can be paid with FSA funds. This includes braces, dental cleanings, and orthodontist visits, in addition to contacts, eyeglasses, and even eye surgery. 

  1. Weight loss programs

Though gym fees and meal plans aren’t approved items, weight loss programs for those diagnosed with heart disease, obesity, or high blood pressure may be acceptable. These types of programs are usually supervised by a medical professional and are specialized to assist individuals in losing weight and jumpstarting a healthier lifestyle. 

  1. Travel for medical care

FSA funds can be used for out-of-town travel or local transportation. It covers a certain amount per night per person when the travel is for the sole purpose of receiving medical services. Transportation coverage includes trains, planes, buses, and extends to ambulance charges and car rental costs. And when using a personal vehicle, funds can be used for parking fees and tolls.

  1. Alcohol or drug treatment 

In-patient and outpatient alcohol or drug programs, including meals and rides to and from treatment, count as FSA expenses, along with support groups like Alcoholics Anonymous. Having tax-free funds set aside for this specific purpose can alleviate some of the financial strain for people seeking options.

This is an overview of some of the main medical expenses individuals may accidentally overlook, not knowing they fall under FSA coverage. Some expenses may require a prescription to be eligible under an FSA, so clients should refer to their plan documents or contact their carriers. But by knowing the full scope of what’s eligible, individuals can optimize their reserves to pay for much-needed healthcare items and services.

Maximizing benefit value with the support of a PEO 

Keeping in constant communication with clients throughout the year is important, especially as benefit rules and choices change. A professional employer organization (PEO) partner like ExtensisHR gives brokers a competitive advantage by providing a fully customized HR solution, which gives clients access to:

A team of benefit experts

Each client is assigned a dedicated team who is available to answer questions and provide ongoing education about benefits and potential plan changes. As newly approved FSA expenses are added, employees are made aware of their current options so they can use their funds accordingly.

Fortune 500 benefit offerings

Access to premium benefit offerings at a cost-effective rate allow small- and medium-sized businesses (SMBs) to stay competitive with larger companies. Today’s employees want a combination of traditional and modern benefits, and a PEO partner can customize a plan which meets the unique demands each company requires.

High deductible health plans (HDHPs)

Employees must be enrolled in a HDHP to contribute to a FSA and receive the tax benefits and flexibility they allow. It can help SMBs lower healthcare costs and give employees more control over when and how they pay for their medical expenses. 

Employee Assistance Program (EAP)

EAPs provide employees free, confidential resources like assessments, short-term counseling, and coaching services to address personal and/or work-related problems. They offer immediate solutions for individuals and point them in the right direction when ongoing and/or extensive care is necessary.

Not every SMB requires the same combination of employee benefits. Rather than implementing a catch-all solution, a PEO partner personalizes HR plans to prioritize your client’s specific needs and demands.

Contact ExtensisHR today to learn how working together can expand your offerings while protecting your client portfolio.

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