One of the people I reached out to today, in my quest to find out how many Flexible Spending Account dollars are forfeited by employees each year, was David Harlow, a healthcare lawyer and consultant who blogs here.
He sent me a link to a Bankrate article which includes this tidbit:
Studies by benefits specialists regularly show that employees typically forfeit more than $100 each year in flexible medical accounts.
So let’s do some math. According to the Department of Labor, as of March 2007, there were 146.3 million people employed in the U.S.
And according to this brief published by the National Business Group on Health, about 15-20% of employees use FSAs.
We’ll be conservative and use the lower percentage.
Fifteen percent of 146.3 million means that 21,945,000 Americans contribute to these accounts.
If we’re conservative again, and say on average these employees forfeit $100 each, that’s nearly $2.2 billion that U.S. employees have earned, but which — thanks to Congress — go to employers instead.
That’s being conservative. The actual number is probably higher.
This, for a program that is supposed to help consumers ease the burden of health care costs.
As if.
Technorati Tags: Health Care Flexible Spending Account
BTW… The FSA program was amended last year to allow participants to carry over any unused balance for up to 75 days into the following year. So, I used to have to claim all of, say, my 2005 deferred salary against medical claims incurred by December 31, 2005. (I had an extra 90 days to file the claim forms, but any medical $$ I spent on or after January 1 had to apply towards a 2006 deferral).
Now I can apply my 2007 deferred cash toward medical bills incurred up until March 15, 2008. That’s a little more cushion, and thus a better program.
Still, it needs to be clearly understood and MANAGED by the employee. One should not just assume it’ll save them money. I counsel those who don’t have KNOWN upcoming applicable bills to pass the program by.
John