Increasing Flexible Spending Account (FSA) Participation Among Government Employees
What was the challenge?
Flexible Spending Accounts (FSAs) allow federal employees to contribute up to $2600 in pre-tax dollars each year for eligible medical expenses, a benefit that can yield significant savings for employees. The General Services Administration had a goal of ensuring that employees who would be interested in FSAs were aware of and utilizing this benefit. More broadly, many employee benefits programs offer uncertain future returns, and employers accordingly seek to develop strategies to effectively communicate these benefits.
What was the program change?
At no material cost, OES worked with GSA communications and human resources to design a targeted communication to GSA employees, delivered via the newsletter GSA Today, to highlight information about the benefits of FSA enrollment. This information was delivered in the first and last week of the open enrollment period.
How did the evaluation work?
GSA employees were randomly assigned to one of four arms. Individuals in the first intervention arm received a targeted communication about the benefits of FSAs delivered via GSA Today; individuals in the second arm received a communication that also highlighted their potential savings (“save $949 over a year”); and individuals in the third arm received a communication that highlighted their potential savings in relative terms (“save 30%”). In the fourth, control arm, employees received no targeted communication about FSAs.
Figure 1: Probability of contributing to FSA by arm
Figure 2: Mean FSA contributions by arm
What was the impact?
The probability of FSA enrollment was unchanged by the targeted communications delivered; employees who did and did not receive targeted communications both had a probability of enrolling of around 28%. Data suggests that around 50% of recipients of GSA Today opened the messages, but click-through rates for the information about FSAs were only about 1%.
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Jessica Leight and Nicholas Wilson. Framing Flexible Spending Accounts: A Large-Scale Field Experiment on Communicating the Return on Medical Savings Accounts. Health Economics 29, no. 2 (2019): 195–208.