Media Center

Americans don’t understand flexible spending accounts (FSAs)

  • 86% of survey respondents had at least one misconception about FSAs
    • One in five respondents (21%) did not know that FSA contributions are not subject to income and social security taxes
    • One quarter (26%) didn’t know that you cannot change your election during the year without a qualifying event (such as the birth of a child)

  • More than half (54%) of all respondents admitted to knowing the least about FSAs compared to other workplace benefits

Americans don’t know what’s covered

  • 78% could not identify which expenses qualified for reimbursement by an FSA, including:
    • Over-the-counter medications
    • Insurance co-payments
    • Contact lenses and solution

Bottom-line return encourages FSA participation

  • 88% of those enrolled in an FSA identified savings as a reason for signing up
    • 45% of those enrolled in an FSA said they signed up to have an available source of funds available for health care expenses

  • 94% of participants felt their FSA contribution was “just right” or “too low”
    • Only 6% thought their contribution was “too high”

Employees confused about access and enrollment

  • 14% of respondents didn’t know if their employer offered an FSA plan

  • Nearly half of individuals (48%) who said their household had access to an FSA claimed to be enrolled. This self-reported percentage represents a much higher number than enrollment data gathered from employers by Mercer (2008 Mercer Employer Benefit survey), potentially indicating that consumers are confused about enrollment in their workplace FSA

FSA fast facts

  • An FSA is an employer-provided benefit that allows participants to utilize a portion of their pre-tax income to pay for qualified medical purchases

  • Qualified health care expenses include over-the-counter medications, dental and vision care and some elective medical procedures, such as LASIK

  • More than 33 million Americans use FSAs

  • More than 80% of large employers with over 500 employees offer FSAs; however, only one in five employees (22%) with access to the benefit signs up (2008 Mercer Employer Benefit survey)

Survey methodology

  • Online survey conducted for the WageWorks Inc. Save Smart, Spend Healthy campaign by Schireson Associates from August 17, 2010 to September 14, 2010

  • 3,000 adult participants, with oversampling in 10 major metropolitan areas, appropriately weighted according to US Census data

  • The standard margin of error was plus or minus 1.8%


Real Stories. Real Users.

Abby

From Florida

“My FSA is a life saver! Last year I was diagnosed with a malignant tumor and luckily I was able to have the necessary surgeries to remove it immediately since my FSA covered all of the out-of-pocket costs for my deductible and medicines.”

Annual Savings: $816

Read more about how real people use their pre-tax benefits.