Help Your Employees Use Benefits at Year End

Many companies boosted their employee benefits plans post-COVID to attract and retain top talent. Yet, each year, a portion of all benefits goes unused. This is true for health care, dental, vision, and flexible spending accounts (FSAs). There are several ways you can help your employees make the most of their benefits dollars:

Health care benefits

Now is the time to take care of any lingering health care needs. While it can be hard to get an appointment during the holidays, it’s worth the effort. Members can try to get on the cancellation list and take the appointment of someone who can’t make it. Flexibility is a must to use up benefits by year end.

Deductibles reset every year, zeroing out the claims from the prior year. Some ways to maximize health care benefits and meet the 2024 deductible include:

• Finding a primary care provider if you don’t already have one.
• Getting up to date on vaccinations and screenings for yourself and the family, based on age and gender recommendations.
• Scheduling an annual physical with laboratory testing for glucose, cholesterol, and other markers of good health.
• Using specialty provider benefits for chronic health concerns or age-recommended visits, such as dermatology or gastroenterology.

Making the most of FSA money

Employees with flexible spending accounts (FSAs) frequently fall prey to the annual “use it or lose it” mandate. Analysis by the Employee Benefit Research Institute (EBRI) shows that about 50% of 3.2 million FSA holders lose money (2022). The average amount forfeited was $441, compared to an average contribution of $1,291.¹

Some FSAs offer a rollover feature with a grace period into early the following year. Otherwise, unused monies go back to the employer. The employer can keep the money and use it for FSA administration costs. They can also help defray employee FSA contributions for the next year or return the money. 

There are several ways to maximize an FSA without forfeiting any contributions, including:

• Submitting outstanding claims within the “runout” timeframe, which is usually 90 days after the year ends.
• Substantiating claims with the documentation required for payment. Documentation needs to get processed by year end.
• Shopping at the FSA Store which stocks only FSA-eligible products for health and wellness.

Employees can also get ahead of next year by activating a new FSA benefits card as soon as they can. If they do not receive a new card, they should ensure their current one is still active. Some FSA plans will have new cards for 2025, while others will not.

Employee benefits cost management

Billions of dollars get wasted annually in underutilized benefits and benefits administration costs. Data from the Bureau of Labor Statistics (BLS) calculates the average cost of civilian employee benefits at 29.7% of compensation. This number equates to $14.41/hour for benefits only, per employee, based on average total compensation of $46.21/hour (June 2024).² 

A Glassdoor survey found that 60% of employees say that benefits matter when choosing a job.³ Health care, dental and vision benefits are top ranked in terms of importance. Benefits, while valued, go unused for lack of understanding or need. 

It’s never a bad idea for companies to analyze their offerings and ensure they align with the team. Employee populations and lifestyle preferences change over time. An analysis can help leaders understand participation rates, most-used benefits, and underused perks. Lost dollars can get recaptured for other investments, better shareholder value, or even higher salaries.