VISICOR Updates Clients on Changes to Flexible Spending Accounts
HOUSTON, TEXAS (November 20, 2012) – VISICOR, an employee benefits brokerage and consulting firm serving the Houston area, is updating all its clients about changes to Flexible Spending Accounts that will take effect January 1, 2013.
Beginning January 1, 2013, Flexible Spending Accounts will have annual limits of $2,500 per year. Employers are still allowed to add supplementary funds to FSA accounts beyond the $2500. The average FSA participant contributes only $1400 per year.
In 2011, over-the-counter medicines, with the exception of insulin, were eliminated as eligible expenses for FSA, HRA and HSA accounts without a prescription, and that rule is still in effect. The penalty for using HSA funds for ineligible expenses is twenty percent of the HSA distribution.
A Flexible Spending Accounts, also known as a flexible arrangement, is a tax-advantaged account that allows an employee to set aside a portion of earnings to pay for qualified medical expenses. Unlike Health Savings Accounts (HSA) or Health Reimbursement Accounts (HRA), FSAs are more commonly offered with traditional medical plans. Another feature of FSAs, which varies from HSAs, is that unused funds at the end of the plan year are lost and cannot be carried over to the following year. Funds in an FSA can be accessed through paper forms or a debit card. Flexible Spending Accounts also allow employees to contribute money to the fund for costs not covered by insurance, deductibles, co-pays, and coinsurance. FSA funds can be used to pay for any healthcare costs that health insurance does not cover.
Fast facts about Flexible Spending Accounts:
- Only 12 percent of employees contribute $2,500 or more to their company’s FSA
- 39 percent say they contribute less than $2,500
- 46 percent don’t participate in an FSA at all
- For more information, contact:
161 W. Shadowbend, Suite 102
Friendswood, Texas 77546
Phone: (281) 824-3124