Increase enrollment in FSAs

Flexible spending accounts (FSAs) are too often overlooked in the whole discussion around health care consumerism. These accounts are great ways for employees to monitor their spending and save money on health care expenses—and they can coordinate with almost any plan.

Unfortunately, FSAs still have a bad reputation among many employee groups. I can remember the mess of submitting paper claims at the last minute and organizing receipts, and those not-fun and down-to-the-wire experiences are embedded in the minds of many employees too. Fortunately now, though, prepaid debit cards and automatic substantiation make these plans easy to use and painless. Some companies even let you link multiple accounts on the same card (like and FSA with an HRA or HSA)—and the behind-the-scenes substantiation process is smart enough to know which account to pull from.

So, how do you get employees to enroll in FSAs? Here are three ways to boost your participation:

1. Offer prepaid debit cards with the accounts—and promote them! The prepaid card often doubles or triples participation compared to the old paper receipt submission method. And, employees who have prepaid cards are happier with them. A 2007 survey showed 81% of employees with prepaid cards are extremely or very satisfied with their FSA compared to 66% without them. Happy employees stay in the plan and help boost participation through word-of-mouth. Profile those happy employees in your communication so others can see how they’re benefiting from the plan.
2. Contribute the the account. Nothing encourages participation more than cold hard cash. Consider making a one-year contribution to all employees’ FSAs. $50 or $100 per employee will make a huge difference in participation and once those employees are enrolled and understand how to use the plan, they’ll be more likely to re-enroll.
3. Require an active enrollment (or fake it). Many employees miss out on FSAs simply because they don’t bother to re-enroll or to do anything during annual enrollment. If enrollment is often a nonevent, push employees to action by having an active enrollment. This means you ask all employees to re-enroll to keep their current plans. You don’t have to be draconian and default everyone to no coverage. You can even promote enrollment like it is active—”You must enroll”—but let employees default to their current coverage if they do nothing. This is particularly effective if you’re rolling out new health plans or pushing employees toward lower cost health plan options.

Note: For people enrolled in a health savings account (HSA), FSAs are a little tricky. You can have a “limited purpose” FSA that only reimburses expenses not covered by the HSA. So, that usually means dental, orthodontia and vision. Pay careful attention if you offer both plans—they require additional communication and coordination.

2007 Survey by the Network Branded Prepaid Card Association