There is a lack of comprehensive account-level data on how workers use their flexible spending accounts (FSAs). In this Issue Brief, we analyze EBRI’s FSA Database to shine a light on these common but under-researched accounts.
The average FSA contribution in 2022 was $1,291. The vast majority — 85 percent — of accountholders took a distribution in 2022. Among those who did, the average distribution was $1,323.
FSA contributions and distributions did not vary significantly conditional on whether or not the account had a grace-period feature, allowed rollovers, or was a “use-it-or-lose-it” FSA.
After temporary COVID-era provisions allowed employers to modify their FSA plans to lift caps on rollover amounts, 2022 marked a return to pre-2020 forfeiture rules. Roughly half of FSA accountholders forfeited funds to their employer in 2022. The average forfeiture was $441.
Accountholder age is strongly correlated with both contributions and distributions. Younger accountholders contributed less and were less likely to take distributions, and when they took distributions, they took smaller distributions than their older counterparts. Younger workers were also more likely to forfeit funds back to their employer.
