Founder and Chairman of Health-E Commerce Jeremy Miller Discusses Educational Efforts for Consumers

Founder and Chairman of Health-E Commerce Jeremy Miller Discusses Educational Efforts for Consumers

The introduction of Flexible Savings Accounts (FSAs) and Health Savings Accounts (HSAs) has helped individuals better manage the high cost of medical expenses and take more control of their personal healthcare. Both are available through employer-sponsored plans, with many employees opting to take advantage of these increasingly popular accounts. There were about 15 million FSAs covering 35 million Americans in 2019, according to Jeremy Miller, Founder and Chairman of Health-E Commerce, a consumer health and wellness online retailer. More than 30 million HSAs covered 63 million people in the United States in 2020, according to Devenir Research.

The challenge, says Jeremy Miller, is that most individuals are confused about how these savings vehicles work and, as a result, underutilize them.

Consumers need to be educated on FSAs and HSAs so they choose the type of account that is right for their needs during open enrollment and take full advantage of the benefits provided, explains Jeremy Miller. Health-E Commerce, in fact, was specifically established to help consumers understand, manage, and maximize the use of their benefits.

Inside How FSAs Work

Employees and employers can make contributions to an FSA tax-free. They are considered “use it or lose it” vehicles as contributions must be used for eligible health care expenses within the same plan year. If they are not used, the funds are forfeited to the employer. (Note: Temporary legislation was passed in 2021 due to the pandemic, providing employers with the option to allow employees to roll over unused 2021 funds into 2022 for use. The law does not extend beyond this year.) The contribution limit for 2022 is $2,850.

Many employees, unfortunately, are unaware that they have to use their funds before year-end. They are confused about the deadline and the requirement to meet it. More than $500 million in FSA funds gets forfeited each year by employees. Jeremy Miller, in a survey conducted by his FSA Store, an online marketplace for FSA-eligible products, shares the following enlightening statistics:

  • 50% of shoppers indicated they are unsure about the recent FSA deadline and rollover changes
  • 75% have not been notified of their deadline, or they don’t recall being notified
  • 37% noted they have a higher balance this year than they did last year, which means they are at risk of losing money

These findings underscore the need for employers, HR, and benefits managers to do a better job educating employees about how an FSA works, the type of products eligible for purchase, and the deadline for using funds in the account.

FSAs can be used to purchase vision care; dental care, pregnancy, fertility, and family planning products; skincare products; over-the-counter medications; menstrual supplies; COVID-19 supplies, and much more.

Inside How HSAs Work

An HSA is also a tax-advantaged medical savings account and can only be used with high-deductible health plans (HDHP), which typically come with a lower premium. Both employees and employers can contribute to the HSA. Employers can choose to make a fixed contribution or “matching” contributions.

You can save money in an HSA to pay for medical expenses that the HDHP doesn’t cover as well as HSA-eligible products. These products include pain relief, acne, and skin care, baby and mom products, first aid, cold and allergy medicine, eye and ear care, diagnostics, menstrual care, vitamins and supplements, and more. You don’t pay any taxes on the money you take out from the HSA to pay for eligible health expenses.

Unlike an FSA, if you don’t use the money in the HSA account, you won’t lose it. You can roll over the funds to the following year.

You can also use an HSA as a retirement vehicle. If you keep a $1,000 balance in the HSA, you can invest a portion of the balance in mutual funds or stocks, for example, and it will continue to grow tax-free.

Jeremy Miller notes that for 2022, HSA contribution limits for self-only coverage are now capped at $3,650. Those with family plans will be able to contribute up to $7,300 in their HSA.

About Jeremy Miller

Jeremy Miller is the Founder and Chairman of Health-E Commerce, the parent brand of FSA Store, HSA Store, WellDeserved Health, Medicare OTC, and Caring Mill. He has been named 2018 EY Entrepreneur of the Year. Under his leadership, Health-E Commerce has also been honored for three consecutive years as a Crain’s Best Places to Work NYC in 2016, 2017, and 2018, and has received a Deloitte Technology Fast 500 Award for being one of the fastest-growing companies in North America in 2016, 2017, 2018, 2019, and 2020.