Flexible Spending Accounts (aka Section 125 Plans) seem to be struggling, even as their HSA (Health Savings Account) cousins are taking off. Although FSA�s have great market share (a LOT of medium- and large-size employers offer them), not so many folks actually avail themselves of the plans.
Briefly, an FSA allows one to sock money away, pre-tax, for unreimbursed medical and daycare expenses. This can save one a great deal of money (after all, it means that Uncle Sam is paying a third of your medical costs), but there�s a potential down-side, as well: FSA�s are �use it or lose it� propositions, which means that money left unspent is forfeited.
According to a recent study by the International Foundation of Employee Benefit Plans, more than 90% of their members offer FSA�s. But, less than 40% of eligible employees actually use them. Even worse, about 7% of the ones who do end up leaving �money on the table.�
Oh, and about a third of the respondents said that their company also offered some type of Consumer Driven Health care product, as well. Unfortunately, the study didn�t indicate how many folks chose that option, or how many actually contributed to an HSA.
Maybe next time.
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