In the current environment, U.S. workers’ take-home pay does not have the same buying power — in fact, half of workers who got a pay raise say their pay was eaten up by higher costs of goods, including medical expenses. While there may be less room to compete on raises or signing bonuses, benefits can help take the financial pressure off employees.
One area that can have a major impact is the cost of care. Health care and care for dependents take more out of some household budgets than shelter. When you need them, there isn’t the option of going without. And both have seen steadily rising prices.
The Rising Profile of Dependent Care
The need for dependent care is growing rapidly. According to the Office of Personnel Management, 29% of the U.S. population provides care for a chronically ill, disabled or aged family member or friend during any given year, and almost half of the workforce expects to be providing elder care for a family member in the coming five years.
Flexible spending accounts (FSAs) allow them to set aside money to pay for care in pre-tax dollars. For federal employees in participating agencies, the Federal Flexible Spending Account Program (FSAFEDS) is already an available benefit.
FSAFEDS offers both health care (HCFSA) and dependent care (DCFSA) accounts. There’s even a limited expense health care (LEX HCFSA) option that can be used for vision and dental expenses if you’re in a high-deductible health plan and have a Health Savings Account (HSA). Money is set aside for your FSA automatically and can be used throughout the year for eligible expenses. If you don’t use it all within the plan year, it can be carried over for the following year. And because it goes into your FSA before payroll taxes are taken, you can save up to 30%.
By allowing tax savings on many care needs, FSAFEDS gives agencies a tool to help employees address rising costs now and in the future.
Employees can enroll in FSAFEDS during the annual Federal Benefits Open Season from November 14 through December 12, 2022, midnight EST. Participants must re-enroll each year to continue utilizing the FSAFEDS program. Visit FSAFEDS.com to learn more and enroll.