J.P. Farley News and Blog

Employees Can Plan FSA Spending for the New Year

At the beginning of a new year, people make resolutions and set goals for what they want to accomplish over the next twelve months. This is great time to remind your employees that they can make a plan for making the most of their flexible spending account (FSA) dollars.

While some of those dollars may be used for an unanticipated medical expense, most people have a number of eligible expenses that they can plan for such as eyeglasses, contacts or dependent care. Instead of reaching the end of the year and realizing that they have to quickly spend FSA money, your employees can look ahead.

For example, you can remind employees that when they go see a doctor for an annual physical, this is a good time to ask the doctor to write them prescriptions for certain over-the-counter drugs they know they will need such as: stomach remedies, medication for motion sickness, baby rash ointment, acne medications, pain relievers, anti-itch and insect bite medications, acid controllers, allergy and sinus medications, sedatives, eye and ear care, cough medications and smoking deterrents.

An FSA offers a great opportunity to save on medical expenses with pre-tax dollars because money that is deducted from an employee’s pay and deposited into an FSA is not subject to payroll taxes. Using an FSA can result in a substantial increase in take-home pay and to really benefit from this opportunity, those dollars need to be spent wisely (and not in a hurry at the end of the year).

Third-party administrator J.P. Farley provides an Account Worksheet that you can give out during their benefit enrollment period, to new employees who start in the middle of the year, and to current employees who are eligible to change their enrollment because of a qualifying life event, such as the birth of a child.

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