FSA Administrators, Clarity Benefit Solutions, Discusses Trends in FSA Enrollment

NEW YORK, Oct. 18, 2018 /PRNewswire/ -- FSA administrators, Clarity Benefit Solutions, discusses trends in FSA enrollment.

Several major Flexible Spending Account (FSA) changes have recently occurred which have impacted these accounts. Inflation has resulted in the contribution limit being lifted to $2,650 this year, which is an increase of $50 from 2017. This rise also pertains to limited-purpose FSAs that are restricted to vision and dental services. The following are additional trends in FSA enrollment.

First, millennials will require dependent care. This age group is getting older, with nearly half of the individuals comprising this generation either starting a family or making plans to start one within the next several years. As a result, enrollment in Dependent Care FSAs will increase to help with the many expenses associated with this stage of life. This trend will also impact older employees that are caring for elderly parents.

Next, FSAs will become nearly as commonplace as 401(k) plans. Studies demonstrate that approximately 87 percent of employees participate in 401(k) plans employers offer them. This data was compiled over several decades, so employers can expect the same phenomenon to occur as FSAs are rolled out. Similar to when employees across the country recognized the importance of contributing toward their retirement, they will realize the significance of setting aside pre-tax dollars to fund out-of-pocket medical expenses. Soon, most people in the workplace will participate in a 401(k) and an FSA or similar healthcare account.

A third trend is that commuters will start to use FSA funds. Commuters can use FSA monies to pay for carpools/vanpools, Uber rides, and similar commuter-related expenses with pre-taxed, FSA funds. In addition, employees who are enrolled in a commuter benefits program also save on payroll tax payments since commuter benefits are considered tax-free and are not employee earnings. Employees also do not have to pay income taxes on the funds they set aside to pay for these commuting expenses, which can mean up to a 40 percent savings on the cost of their commute.

About Clarity Benefit Solutions: Clarity Benefit Solutions FSA company provides technology that makes the health insurance plan selection process fast, easy, and straightforward. For over two decades, we have provided clients with industry-leading technology, compliance, and exceptional customer service. Our offering is designed to save time and lower the costs of managing benefits while also promoting employee self-service and automated ACA compliance.

SOURCE Clarity Benefit Solutions

Related Links

http://www.claritybenefitsolutions.com

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