3 tips to help employees understand FSA/HSA changes during open enrollment
Oct 06, 2020
This
year’s open enrollment period will be one for the books. Employees will be
faced with a myriad of new benefit options, many of which originated as a
result of the COVID-19 pandemic. However, as companies continue to extend their
remote environments, some through the end of 2020, a large contingent of
workers will be making these important decisions without the in-person support
of their human resources teams.
That
means employee communications and education has to take a front seat
during open enrollment.
One
benefit, in particular, that has seen significant change this year is
tax-advantaged spending accounts. Health savings accounts (HSAs) and flexible
spending accounts (FSAs) are an important tool for people of all ages and
income levels because these benefits allow them to pay for out-of-pocket health
care expenses — or save for expenses in retirement– with pre-tax income.
More than 70 million Americans are currently enrolled in HSAs and FSAs,
helping them get more value from their health care dollars and reduce their
taxable income.
Here
are three things benefits professionals can do to give employees a solid
foundation of knowledge during open enrollment this year.
1. Understand what’s different.
The
amount of change and variables this year is mind-numbing. But understanding
what’s new can have a meaningful impact on how individuals choose to allocate
their benefits dollars. The passage of the CARES Act in March, for example,
made two new product categories eligible for reimbursement with an FSA or HSA:
over-the-counter (OTC) medicines and menstrual care products.
This
change means account holders can buy pain relievers, allergy medications, skin
care treatments, and much more without a prescription. In addition, for the
first time ever, account holders can purchase tampons, pads, menstrual cups,
period underwear, and liners with their FSA, helping people save thousands each
year on these essential health products.
Understanding
these changes will help employees who are considering an FSA or HSA make
informed decisions about their anticipated health care needs and how much
pre-tax money to set aside.
2. Keep track of ongoing guidance for benefit changes.
The
COVID-19 pandemic has made both employee benefits and benefit changes pivotal
for employees as the public health crisis surges on. This has triggered an
evolution in health care needs and spending. For example, prevention is
becoming a priority for more consumers and shopping for products to support
everyday health and well-being is increasingly happening from the safety and
comfort of home. And, because elective procedures and preventive screenings
have been prohibited due to COVID-19 restrictions, employees may find
themselves with extra money in their spending accounts. Meanwhile, financial
pressures are driving home the ability of FSAs to help account holders spend
and save their hard-earned dollars.
In
response to this dynamic, the IRS earlier this year made the unprecedented
decision to allow account holders to change their contribution amount,
disenroll or enroll in an FSA, if their employer offered this option. This left
many employers scrambling to create a special open enrollment period for FSA
users, and as a result, just under half (47%) committed to some type of
mid-year plan change (SHRM).
This
IRS announcement is a clear example of why open enrollment isn’t just a once
per year process. Employers need to be flexible and be prepared at any point in
the calendar year to help employees maximize the potential of their benefits
and give a helping hand to educate quickly when these changes occur.
3. Educate employees from a distance.
In-person
education and enrollment are more challenging this year, as more than half of
employees are still working remotely making large, in-person education sessions
unadvisable. As a result, benefits professionals will need to find new tools
and virtual options to educate employees and facilitate enrollment. In fact, an
estimated 63% of employers say they plan to rely more strongly on online
resources this year in response to COVID-19.
To
support benefits professionals in this effort, Health-E Commerce, parent brand
of FSAstore.com and HSAstore.com, has rolled out a new digital open enrollment
tool that is free of charge to any employer or individual wanting to learn
how an FSA or HSA works, which account is right for them, and how a spending
account can help them make wise use of health care dollars. Consider offering
this as a resource to help employees identify the best options for their
circumstances.
There’s
no question that this open enrollment period presents unique challenges, but it
also presents opportunities to support employees when and how they need it
most. Now is the perfect time to begin educating employees so they can get the
most from their health benefits and their health care dollars.
SOURCE: benefitsPRO