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 gain a better understanding of how workers contribute to and withdraw from their FSAs and how usage varies by FSA type and age.
The average FSA contribution in 2020 was $1,265. The vast majority of workers — 89 percent — took a distribution, and among workers who took a distribution, the average distribution was $1,287.
Workers who had a limited-purpose FSA (LPFSA) made much smaller contributions than workers who had a standard health care FSA; $859 vs. $1,259. Additionally, fewer workers with LPFSAs took distributions compared with workers with a standard health care FSA. Seventy-four percent of workers with an LPFSA took a distribution, compared with 90 percent of workers with a standard health care FSA.
FSA contributions and balances did not significantly vary based on whether the accountholder had a “use-it-or-lose-it” FSA, an FSA with a grace period, or an FSA with a rollover feature.
Accountholder age was strongly correlated with both contributions and distributions. Older accountholders contributed more on average than their younger counterparts. Additionally, they were more likely to take distributions, and when they did, took larger distributions than younger workers.
