Survey of Flexible Spending Account (FSA) Administrators by Alegeus Technologies Reveals Reactions and Predictions to Recent FSA ‘Rollover’ Announcement
Published on November 24th, 2013
Alegeus Technologies, the market leader in healthcare and benefit payments, today announced the results of a recent survey of flexible spending account (FSA) administrators, providing reactions and predictions regarding the recent ‘FSA rollover’ announcement by the US Department of Treasury. Survey results point to significant employer rollover adoption for the 2014 plan year and modest gains in both FSA enrollment and account contributions.
On October 31, 2013 the US Treasury Department modified its so-called “use-it-or-lose-it” provision, giving employers the option of allowing participants to roll over up to $500 of unused funds at the end of the plan year. Previously, any funds remaining in an FSA at the end of the plan year (or after a grace period) were forfeited to the employer. Following the announcement, Alegeus conducted a survey of more than 200 FSA administrators, which revealed:
- When asked which option will be more compelling to participants, nearly 80 percent of survey participants indicated that ‘rollover’ will be more compelling than ‘grace period’
- Although employers have the option of amending 2013 FSA plans to include the rollover, 47 percent of survey respondents predict that less than a quarter of employers will do so
- In contrast, rollover adoption for 2014 FSA plans is anticipated to be more significant – with 33 percent of survey respondents predicting that more than half of employers will adopt, and 22 percent predicting more than 75 percent will adopt
- For plan year 2014, the majority of survey respondents predict a 10-25 percent growth in both FSA enrollment and account contributions as a result of this rule change; anecdotal feedback from Alegeus clients suggests that those numbers could climb higher in subsequent plan years
The new rollover provision is wonderful news for employers and employees alike – giving them greater flexibility and control over their healthcare decisions,” said Tom Torre, Chief Executive Officer of Alegeus Technologies. “This policy change has been universally well received by our clients – who are very excited by its potential to drive measurable impact on both FSA enrollment and account contributions. All are eager to fully understand the nuances of the new rule and the practical considerations for implementation – so that they can capitalize on this forecasted growth.
The good news for Alegeus clients – the FSA rollover feature functionality is available immediately within the Alegeus technology platform with no development required. Card processing clients can establish rollover purses and add rollover funds to the new year at the appropriate time. Likewise, the Alegeus account administration platform is already set up to automate rollover on an employer-by-employer basis – moving money from prior-year to the new plan year and providing the ability to pay or split claims from a prior year’s remaining funds and rollover money during the run-out period. The system can ensure that rollover money doesn’t pay for dates of service prior to employee’s enrollment date in original FSA. And it offers administrators the ability to set priority of funds during and after run-out period.
Alegeus is committed to supporting our clients through this change,” said Torre. “Our ability to instantly deliver this critical rollover functionality in our technology platform, combined with turnkey marketing materials to support rollover-related communications to employers and employees, gives our clients the ultimate flexibility to implement this change immediately or in future plan years.
With more than 25 years of growth and innovation, Alegeus is the market leader in SaaS-based healthcare payment solutions. Our highly flexible, white-label platform powers account-based benefit programs such as HSAs, FSAs, HRAs, COBRA, wellness incentives, lifestyle benefits and beyond. We deliver exceptional user experiences and differentiated capabilities that help our partners strengthen their product offerings, operate more efficiently, and unlock their full growth potential. Our partnerships with the industry’s leading health plans, third-party administrators, financial services and benefit solution providers give Alegeus unparalleled reach in the market. And our unique partnership model empowers our clients to achieve outsized results – growing their programs at a rate that is 2-3X the market, and with the highest net promoter scores (NPS) in the industry. We never compete with our clients – we win when they win. Alegeus is headquartered in Waltham, Mass., with operations centers in Orlando and Bangalore, and a large remote workforce.