How to drive employee pre-tax education and engagement
There are many upsides to pre-tax benefits. Get guidelines for employee pre-tax education to ensure your workforce knows how to make the most of pre-tax programs.
Helping employees understand pre-tax benefits
Employee pre-tax spending accounts offer employees more opportunities to save money on qualified expenses when paired with more traditional coverage. However, understanding what counts as a qualifying expense is crucial to an employee's ability to plan their contributions and get the most benefit from their pre-tax spending accounts.
In March 2020, the CARES Act opened the doors for new qualifying expenses for healthcare FSAs. Employees can now use HSA/FSA funds to cover over-the-counter medications like cold, flu, or pain relief products–as well as menstrual products and telehealth services.
Encourage employees to spend the money in their pre-tax spending accounts – especially the funds within an FSA since they don’t roll over and aren’t portable. Employees can use healthcare FSA funds for themselves or cover expenses for children up to age 26.
How much money employees should contribute to their pre-tax spending accounts depends on their anticipated costs. Aside from unexpected complications, most people have a sense of how much they spend on healthcare and dependent care each year. The amount isn’t insignificant. According to the Centers for Medicare and Medicaid Services, the average American spends just over $12,500 on healthcare yearly.
Driving education and engagement for employee pre-tax benefits
It doesn’t matter how extensive your pre-tax benefit program is – if employees don’t understand it, they won’t use the program to its full potential. Communicating with employees about benefits and educating them on the advantages of pre-tax accounts is crucial for engagement. Employers should leverage all possible communication channels to get the message across.
Ensure employees have a firm grasp on pre-tax benefits by providing material outlining the program basics. Distribute materials to all employees and post information on all the company channels (i.e., website, email, flyers, and posters in high-traffic areas).
Consider quarterly reminders to drive FSA engagement, encouraging employees to check balances and spend funds. Increase the frequency of reminders in the last quarter. When applicable, you may want to issue a warning to employees who risk losing unspent funds. Try putting “use it or lose it” in the subject field to grab attention.
As an added measure, send communication with suggestions for using pre-tax benefit funds. For example, suggest employees stock up on over-the-counter allergy medication when allergens tick up seasonally.
Experience employee pre-tax benefits and more with Forma
Pre-tax benefits help employees decrease their tax liability while covering costly expenses with pre-tax dollars. The accounts are a financial and lifestyle tool to help employees save money while getting the products and services they need. Educating employees about the differences between various spending accounts, such as LSAs, HSAs, FSAs, and Commuter programs is imperative to driving engagement.
Forma’s flexible benefits software helps companies offer competitive benefits packages while reducing costs and inefficiencies, by giving choices in how employees spend their benefit allowances.
Using Forma, select Lifestyle Spending Accounts, Health Spending Accounts, Health Reimbursement Arrangements, and Flexible Spending Accounts to customize your program. Employees have three choices to spend funds: The Forma Store with discounted products/services, The Forma Visa Card, or claim reimbursement backed by Forma’s world-class member support team.
Book a consultation with a Forma expert to get started building your custom program.
Interested in learning more? Choose from one, some, or all of the links to view more details on pre-tax benefit programs.