What's Happening?
As the end of the year approaches, individuals with Flexible Savings Accounts (FSA) are being reminded to utilize their funds before they expire on December 31. FSAs, which are funded by pre-tax paychecks, are designed to cover medical expenses such as deductibles and co-pays. However, many account holders are unaware that these funds can also be used for a variety of beauty and wellness products. According to Fast Company, in 2023, approximately half of all FSA account holders forfeited some funds back to their employers, with an average of $436 left unused. Products eligible for FSA spending include sunscreen, LED face masks, and certain skincare items with SPF ratings. Retailers like Sephora and Ulta have dedicated sections for FSA-eligible
products, and brands such as Clarins and La Roche-Posay offer specific items that qualify. Payment methods vary, with some retailers accepting FSA debit cards directly, while others require a standard credit card with subsequent reimbursement claims.
Why It's Important?
The urgency to use FSA funds before they expire highlights a significant financial opportunity for consumers to maximize their healthcare benefits. By spending these funds on eligible beauty and wellness products, individuals can effectively reduce out-of-pocket expenses for items that contribute to their health and well-being. This not only benefits consumers by allowing them to purchase high-demand products but also supports the beauty and wellness industry by driving sales. The forfeiture of FSA funds back to employers represents a missed opportunity for consumers to leverage their pre-tax earnings, emphasizing the need for increased awareness and education about FSA benefits and eligible expenses.
What's Next?
With only a few days left until the deadline, FSA account holders are encouraged to review their balances and make informed purchasing decisions to avoid losing their funds. Retailers and brands may see a surge in sales as consumers rush to utilize their accounts. Additionally, there may be increased efforts from employers and financial advisors to educate employees about the benefits and usage of FSAs to prevent future forfeitures. As awareness grows, it is likely that more consumers will take advantage of these accounts, leading to a more informed and financially savvy public.
