Did you know that only 22% of employees take advantage of the Flexible Spending Account or FSA healthcare option? The other 78% said they didn’t enroll because they didn’t understand the benefits of this type of account.

An FSA is an employer-sponsored healthcare benefit that allows employees to set aside money annually to cover the cost of qualified medical expenses. FSAs work on an annual plan-year basis and are funded through regular payroll deductions on a pretax basis.

To break that down, an FSA can allow you to take home a larger paycheck because the savings amount is pretax, which lowers your total taxable income.

You can use FSA funds for many things like: 

  • Prescription drugs
  • Doctor visits
  • Annual health or dental deductibles
  • Orthodontics
  • Chiropractic care
  • Counseling sessions or therapy
  • Prescription glasses or sunglasses
  • Over-the-counter products

We offer two types of accounts:

  • Healthcare FSA—pretax dollars for things mentioned above
  • Dependent FSA—pretax savings for your dependents for things like daycare, babysitting, summer, or elder care

Because of the tax benefits FSA accounts bring, the IRS places guidelines on them. FSA funds are subject to a use-it-or-lose-it rule, which means you must spend funds in this account before the deadline. So we recommend planning your contributions thoughtfully–save enough to cover your expenses but not too much that you can’t spend it all before the deadline.

Here are some FSA pros and cons.

Let’s lead with the only con.

Con: You may not spend every dollar you’ve saved—Because there are tax benefits to an FSA, the IRS places guidelines on them. FSA funds are subject to a use-it-or-lose-it rule, which means you must spend funds in this account before the deadline. Employees might be afraid of losing money before they have time to spend it.  However, there is a “Grace Period,” so you can use your 2024 FSA funds to pay medical expenses through March 15, 2025.

Pro: Give yourself a tax break—You can contribute up to $3,200 annually to a healthcare FSA and $5,000 to a dependent FSA tax-free to fund your FSA. These are pretax dollars, allowing you significant tax savings.

Pro: Save on everyday items—You can use your FSA on band-aids, co-pays, reading glasses, sunscreen, and more. What’s better is that you’re saving money on these items because you use pretax dollars to purchase them. 

Pro: Your money is easy to access—your funds are accessible using an FSA debit card, so you can buy the items you need in a store or online.

Enrolling is simple!

  • Log into Dayforce.
  • Your username is your employee ID, and your password is your date of birth, MMDDYYYY.
  • To begin enrollment, click the Benefits icon and select Overview at the top.
  • All available enrollments are listed under the Enrollments section. When you’re ready to begin, click Start Enrollment.
  • Please make sure you tap Submit to complete your enrollment.

Don’t miss this once-a-year opportunity to enroll. Remember, enrollment only runs between October 21 and November 1.