by admin | Mar 11, 2026 | Blog
As the March 15 FSA grace period gets closer, lots of people are taking a last look at their Flexible Spending Account (FSA) balances and figuring out how to use any leftover dollars before they disappear. If your employer offers a grace period, you get an extra 2.5 months—through March 15, 2026—to spend any remaining 2025 FSA funds. After that date, any unspent money goes back to your employer under IRS rules.
Knowing how the grace period works—and what you’re still allowed to buy—can make the difference between losing money and putting every dollar to good use.
What Is the FSA Grace Period?
The IRS gives employers the option to extend your FSA spending window by 2.5 extra months, which means you can continue using the previous year’s funds until March 15. So, if you still have 2025 money left in your account, you can use it on eligible expenses incurred up to March 15, 2026.
A few things to keep in mind:
- Your employer chooses the rules. They can offer either a grace period or a carryover (up to $680 for 2026), but they can’t offer both.
- Some plans also include a run‑out period, which simply gives you extra time to submit receipts—but doesn’t let you incur new expenses.
- Since every employer sets their own FSA options, it’s always a good idea to check the details of your specific plan so you know exactly what deadlines and exceptions apply to you.
What Can You Buy With Your FSA Funds Before March 15?
Here are the top five most useful, season‑ready picks from FSA Store — all guaranteed eligible and perfect for early‑spring needs.
1. Sunscreen (SPF 15+ Broad Spectrum)
A must‑have as the weather warms. All sunscreens SPF 15+ and broad‑spectrum are FSA‑eligible, and FSA Store carries dozens of options.
Shop here: Sunscreen Collection
2. Cold & Allergy Relief
Whether it’s lingering cold season or rising spring allergies, you can use FSA dollars on OTC remedies — no prescription required under current rules.
Shop here: Cold & Allergy Category
3. First Aid Kits
A fresh first‑aid kit is always a smart buy — especially with outdoor season coming up. Choose from family kits, travel kits, or expanded medical kits.
Shop here: First Aid Kits & Supplies
4. Contact Lens Solution
Daily essentials for contact lens wearers — cleaning solution, disinfecting systems, rewetting drops, and lens cases are all eligible.
Shop here: Contact Lens Care
5. Heating Pads
Perfect for muscle tension, cramps, or easing the aches that come with getting active again. FSA Store carries everything from standard pads to weighted massaging options.
Shop here: Heating Pads
Tips to Maximize Your Remaining FSA Dollars
- Check your balance today. Log into your account and verify how much you have left.
- Shop verified FSA‑eligible products. Online marketplaces like FSA Store carry only approved items, reducing guesswork.
- Book appointments immediately. Spots fill quickly before the deadline.
- Save receipts. Some expenses may require documentation or letters of medical necessity.
If your plan includes the grace period, March 15, 2026 is your absolute last day to incur expenses using 2025 FSA funds. Don’t let your remaining balance disappear—smart spending now means more value from your pretax dollars.
by admin | Feb 9, 2026 | Blog
Adoption is a life‑changing journey, but it also comes with significant financial challenges. While the federal adoption tax credit offers meaningful relief, many employees still struggle to cover upfront expenses or fully benefit from the credit. For employers—especially small companies working with tight benefits budgets—the question often becomes: Should we offer adoption assistance benefits when a tax credit already exists?
The short answer: yes. And here’s why.
1. Adoption Expenses Often Exceed the Federal Tax Credit
For 2026, the federal adoption tax credit allows up to $17,670 per child, with up to $5,120 refundable. While helpful, adoption costs can easily surpass these limits. Private domestic, agency, and international adoptions often range from $20,000 to over $50,000.
Employer adoption assistance can help fill this financial gap, reducing out‑of‑pocket expenses for employees and making adoption more accessible.
2. Employees Typically Use the Tax Credit First—But It Doesn’t Replace Employer Support
Because employer‑provided adoption benefits are treated as taxable wages for FICA purposes, most employees will understandably use the tax credit first. The credit usually offers greater financial value upfront.
However, the credit alone rarely covers all expenses—and employees can use both the tax credit and employer reimbursement, as long as it’s not for the same dollar of expense.
Employer benefits remain a critical supplement.
3. Lower‑Income Employees Often Can’t Use the Full Tax Credit
Even with a partially refundable credit, lower-income employees may not have enough tax liability to use the credit’s full value. While unused credits can be carried forward for up to five years, not everyone benefits fully before credits expire.
Employer-provided assistance can help bridge the gap, giving employees meaningful financial support regardless of their tax liability.
4. Employer Reimbursements Improve Employee Cash Flow
Unlike the tax credit—which can only be claimed after finalizing expenses—adoption assistance benefits can provide immediate financial relief. Whether through direct payments or quick reimbursements, employer support can help employees:
- Avoid costly personal loans
- Manage sudden or large adoption expenses
- Reduce financial stress during an emotionally intense process
For many families, improving cash flow is just as valuable as reducing the total cost of adoption.
5. Employers Can Offer Adoption Benefits With Minimal Cost
One major misconception is that offering adoption benefits requires a large employer contribution. In reality, a qualified adoption assistance program can be established with little or no employer funding.
Here’s how:
- Employees can use pre‑tax salary reductions to fund adoption expenses through a cafeteria plan.
- Special‑needs adoptions receive unique tax treatment—employees may qualify for a full income tax exclusion simply because an employer has a qualifying program in place, even if the employer contributes nothing.
This means even small companies can provide meaningful value at minimal cost.
6. Adoption Benefits Strengthen Recruitment, Retention, and Culture
Today’s workforce cares deeply about family-friendly policies. Adoption assistance benefits can:
- Set your company apart from competitors
- Support diversity in family-building paths
- Foster a compassionate, inclusive culture
- Appeal to employees who value equity between biological and adoptive parents
Since most employers already subsidize the cost of childbirth through health insurance, offering adoption benefits promotes fairness and signals a genuine commitment to employee well-being.
Even with a federal tax credit in place, employer-provided adoption assistance benefits offer unique financial, emotional, and practical support that the tax credit alone cannot. For many companies—large and small—these benefits are a powerful way to demonstrate values, strengthen your employer brand, and support employees as they grow their families.
Source: Thomson Reuters
by admin | Jan 12, 2026 | Blog
Flu season is in full swing, and being prepared can make all the difference. The best part? You can use your FSA or HSA funds to stock up on these health essentials without spending extra out-of-pocket.
Here are the top 5 FSA/HSA-approved products to keep you healthy this season:
1. Thermometers
A reliable thermometer is a must for tracking fevers. Digital and smart thermometers are FSA/HSA eligible and help you monitor symptoms accurately.
🔗 Buy a FSA‑eligible thermometer
2. Over-the-Counter Medications
Pain relievers, fever reducers, and cough/cold medicines are often eligible with a prescription. Check your FSA/HSA store for flu symptom relief bundles.
🔗 Shop FSA‑eligible cold & flu meds
3. Humidifiers
Combat dry air and soothe congestion with a humidifier. Many models qualify for FSA/HSA coverage.
🔗 See eligible humidifiers
4. Saline Nasal Sprays
Affordable and effective, saline sprays help relieve nasal congestion and keep your sinuses clear.
🔗 Buy FSA/HSA‑eligible saline spray
5. Face Masks & Hand Sanitizers
Preventing the spread of germs is just as important as treating symptoms. Stock up on masks and sanitizers—both are typically covered.
🔗 Learn about mask & sanitizer eligibility
Why Use FSA/HSA Funds?
Using your tax-free dollars for flu season essentials is a smart way to save money while staying healthy. Don’t forget to check your FSA/HSA store for seasonal deals before your plan year ends!
For a full list of all eligible FSA items click here.
by admin | Dec 11, 2025 | Blog
Big news! The IRS just explained how the One Big Beautiful Bill Act (OBBBA) changes Health Savings Account (HSA) rules. Here’s what it means in plain language:
✅ 1. Telehealth Gets the Green Light
- If your high-deductible health plan (HDHP) covered telehealth before July 4, 2025, you can still put money into your HSA for the whole year.
- Only services on the official Medicare telehealth list count. In-person visits, equipment, or prescriptions don’t qualify unless listed.
✅ 2. Bronze & Catastrophic Plans Count as HDHPs
- Starting in 2026, bronze and catastrophic plans from ACA exchanges will qualify as HDHPs—even if they don’t meet the usual deductible rules.
- Employers can use ICHRAs to help employees buy these plans.
✅ 3. Direct Primary Care (DPCSA) Rules
- Monthly fee limits: $150 per person or $300 per family.
- Fees must be fixed and regular—no surprise bills for members.
- HDHPs can’t count these fees toward deductibles or offer extra primary care before the deductible.
✅ 4. Using Your HSA for DPCSA Fees
- You can use HSA money for DPCSA fees if they only cover primary care and follow IRS rules.
- If fees go over the monthly limit, you can’t add money to your HSA during that time.
- Employer-paid fees can’t be reimbursed from your HSA.
What Should You Do?
- Check your telehealth coverage.
- Update plan info for bronze/catastrophic HDHP status.
- Make sure DPCSA agreements follow the new limits.
- Share these changes with employees.
Bottom Line: These updates make HSAs more flexible for telehealth, ACA plans, and direct primary care—but you need to follow the IRS rules to stay eligible.
Source: Thomson Reuters
by admin | Oct 20, 2025 | Blog
New 2026 limit provides greater savings flexibility for working families
Effective January 2026, the annual contribution limit for Dependent Care FSAs will increase from $5,000 to $7,500 per household. For those married filing separately, the limit rises from $2,500 to $3,750. This is the first permanent increase since the benefit was established in 1986, intended to help working families manage rising childcare costs.
This change was introduced as part of the One Big Beautiful Bill Act, signed into law on July 4, 2025. The bill includes sweeping updates to employee benefits, aiming to provide greater financial flexibility for working families
A Dependent Care Flexible Spending Account (DCA or Dependent Care FSA) is a pre-tax benefit account that allows employees to set aside money to pay for eligible child or adult dependent care expenses. These can include daycare, preschool, before- and after-school programs, and elder care services—provided the care enables the employee (and spouse, if applicable) to work or look for work.
Key Considerations for Employers
- Plan updates required: Employers must revise Section 125 cafeteria plan documents to reflect the new limits.
- Nondiscrimination Testing still applies: Plans must pass IRS rules to ensure fairness across income levels.
- Clear communication is essential: Employees need to understand the new limits, deadlines, and use-it-or-lose-it rules.
- Employers should connect with their HRIS partners/vendors to update system configurations accordingly.
- Employers with non–calendar-year plans may adopt the higher limit effective January 1, 2026, provided their plan documents are amended accordingly. Employers must also ensure no employee exceeds the annual $7,500 contribution limit for the 2026 tax year.
Employers may adopt the increased limit with their next plan renewal. If adopted, be sure to update payroll systems, plan documents, and employee communications before the start of the plan year.
