Temporary deadline and rollover extensions introduced during the pandemic are set to expire in December 2022, giving account holders only six months to understand their deadline and spend remaining funds before it's too late
NEW YORK, July 6, 2022 /PRNewswire-PRWeb/ -- As Americans are battling increasing costs on everything from food to furniture to travel, the December 31 use-it-or-lose-it deadline for flexible spending account (FSA) funds may not be top of mind. However, confusion about temporary deadline extensions and rollover changes introduced during the pandemic is leading to increased FSA forfeitures, and this will continue if account holders don't take time to plan ahead. Health-E Commerce, parent brand to FSAstore.com – the first and leading online marketplace dedicated exclusively to selling FSA-eligible products – is releasing tips and reminders to increase consumer understanding so account holders can use, not lose, their valuable healthcare dollars.
Why is this year different?
The Consolidated Appropriations Act of 2021 provided much-needed flexibility for FSA users during the COVID-19 pandemic, by giving employers who offer FSAs the option to extend their normal plan year deadline and balance carryover option. Those extensions – all of which were optional and offered by less than half of employer plan sponsors – will expire in 2022, creating more confusion and perhaps higher balances to spend down than ever before. Deadlines and extensions may include:
- December 31 use-it-or-lose-it deadline. The majority of employers that offer an FSA have a December 31 deadline, which means that all FSA funds must be spent by December 31 or they are forfeited back to the employer. During the pandemic, employers had the option to change their deadline; however, many did not and this deadline may still hold true.
- Grace period deadline. Employers may opt to give employees a grace period of two-and-a-half months (for a December 31 deadline, until March 15) to spend down FSA funds from the previous calendar year. During the pandemic, employers were given the option to extend the grace period up to 12 months for plan years ending in 2021. This means that employees may still have 2021 grace period funds that will expire on December 31, 2022, in addition to their 2022 FSA dollars to consider.
- Carryover extension. Employers may allow employees to carryover up to $570 (2022) in FSA funds to the next plan year. During the pandemic, employers had the option to allow employees to carryover their entire unused FSA balance to 2021 and 2022. This option also expires in 2022, so if an employee had a 2021 carryover of their full remaining balance, those funds combined with their 2022 election could mean more funds than ever before to spend ahead of the renewed deadline.
"Education and access to consumer-friendly tools is key to making the most of FSA funds, particularly during times of change and economic uncertainty," said Rachel Rouleau, chief compliance officer for Health-E Commerce. "As pandemic-inspired rule changes expire this year, it's essential that consumers understand their FSA deadlines, and take time to budget for their health needs over the coming six months so they can make the most of their tax-free healthcare dollars."
Steps to take now
To avoid losing FSA funds this year, Health-E Commerce suggests consumers take the following steps:
- Check your FSA balance. Check your online FSA portal or contact your FSA administrator to confirm your remaining account balance.
- Know your deadline. Confirm what your FSA deadline is and if your employer offers a grace period or carryover option, and know and track when that deadline date is.
- Map your spending for the next six months. Use a comprehensive eligibility list to map your spending for the remainder of the year to ensure you don't leave any tax-free funds on the table due to a missed deadline.
To help consumers map their spending for the next six months, Health-E Commerce recently launched interactive online eligibility lists designed to simplify understanding and spending of tax-free healthcare dollars. The new resource can be personalized to individual preferences, so account holders can shop by product, category, lifestyle, or health need.
To learn more about FSA deadlines, visit the FSA Learning Center at FSAstore.com.
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Media contact: Barbara Tabor, [email protected], 651-230-9192
About Health-E Commerce
Health-E Commerce is the parent brand to FSA Store, HSA Store and WellDeservedHealth, a family of online marketplaces that serve the 70+ million consumers enrolled in pre-tax health and wellness accounts. The company also created Caring Mill, a popular private-label line of health products that benefits Children's Health Fund and enables customers to make a donation with each purchase. Since 2010, the Health-E Commerce brands have led the direct-to-consumer e-commerce market for exclusively pre-tax health and wellness benefits. Health-E Commerce plays an essential role in expanding product eligibility for important new categories within the list of eligible medical expenses.
Media Contact
Barbara Tabor, Health-E Commerce, 651-230-9192, [email protected]
SOURCE Health-E Commerce
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