HSA/FSA
HSA/FSA
HSA/FSA
HSA/FSA
What Are HSAs & FSAs
What Are HSAs & FSAs
What Are HSAs & FSAs
What Are HSAs & FSAs
Flex is here to help you understand all the most important aspects of HSAs and FSAs so you can make the right decisions for your health and finances.
Flex is here to help you understand all the most important aspects of HSAs and FSAs so you can make the right decisions for your health and finances.
Flex is here to help you understand all the most important aspects of HSAs and FSAs so you can make the right decisions for your health and finances.
Flex is here to help you understand all the most important aspects of HSAs and FSAs so you can make the right decisions for your health and finances.
May 15, 2023
May 15, 2023
May 15, 2023
May 15, 2023
Sam O'Keefe
Co-founder & CEO of Flex
Sam O'Keefe
Co-founder & CEO of Flex
Sam O'Keefe
Co-founder & CEO of Flex
Sam O'Keefe
Co-founder & CEO of Flex
Overview
Imagine you could reduce the cost of your out of pocket medical expenses and take advantage of tax benefits all at the same time? What if you could use funds designated for health on fitness, nutrition, or even sleep products or services that actually improve your health for the long term, instead of only treating the symptoms of illness?
Enter HSA and FSA accounts. Iff you're feeling confused or overwhelmed trying to understand HSA and FSAs, you’re not alone! Sixty-five percent of Americans struggle with the basic benefits and differences between these accounts.
Flex is here to help you understand all the most important aspects of HSAs and FSAs so you can make the right decisions for your health and finances.
What is an HSA?
A health savings account, or HSA, is a savings account set up exclusively for health related expenses.
The Benefits
HSA accounts are triple tax-advantaged, meaning there are three ways you can save money by leveraging these accounts. You as an individual own your HSA so funds stay with you year to year, even if you change jobs.
Tax Free Contributions - When you opt to open and contribute to an HSA, money is taken out of your paycheck pre-tax, lowering your tax burden overall.
Tax Free Growth - While you can keep cash sitting in your HSA, most accounts allow you to invest your money. This could be a good option if you don’t have current health related expenses but anticipate having expenses in the future. The percent of your account you’re allowed to invest and the exact investment vehicles vary depending on your account provider so if this is an area of interest, definitely investigate more!
Tax Free Withdrawals - When you spend money from your HSA on qualified expenses, you do so tax free. Should you accidentally spend HSA money on non-qualified expenses, you’ll owe taxes and pay a 20% penalty so always confirm eligibility before you buy. Once you reach the age of 65, the 20% penalty is waived for non-qualified expenses but the withdrawals will still be taxed.
How do I open an HSA?
In order to open an HSA, you need to have a high deductible health plan, or HDHP. For a health plan to qualify as high deductible, it must have a deductible of at least $1600 for an individual plan or $3200 for a family plan in 2024.
Unfortunately, you cannot open an HSA while on Medicare or if you’re claimed as a dependent on someone else's tax return.
HSAs are most commonly offered along with your healthcare plan through your employer but they don’t have to be. If you purchased a HDHP on the open market for example, you could go directly to an HSA provider and open an account directly. Several of the largest providers are Lively, HealthEquity, and Fidelity.
What is an FSA?
For this context, we’re going to be focused on a healthcare flexible savings account, or HC FSA. (There are other types of FSAs that we will not cover here, namely a dependent care FSA and limited expense FSA.)
The Benefits
Tax Free Contributions - When you opt to open and contribute to an FSA, money is taken out of your paycheck pre-tax, lowering your tax burden overall.
Tax Free Withdrawals - When you spend money from your FSA on qualified expenses, you do so tax free.
Be Aware
Unlike HSAs, FSAs are employer owned which means that for the most part, FSAs are use-it-or-lose-it. Any money in the account not used by the end of the calendar year, is forfeited.
Some employers will allow for a grace period during the first month or two of the new year but to be safe, plan to spend your funds by December 31st each year.
How do I open an FSA?
FSAs are employer owned so unfortunately you can’t set one up on your own in the same way you can an HSA.
If your employer does offer an FSA, opt in during open enrollment and decide how much you’d like to contribute to the account.
Why should you open an HSA or FSA?
So what’s the purpose or benefit of having an HSA or FSA? If you have health insurance, why would you need another plan or employer benefit for healthcare?
The long and short of it is that HSAs and FSAs can help you save money. On average, consumers save 30 to 40% percent on purchases they make with their HSA/FSA.
Even with health insurance, healthcare and health related spending can still be very expensive. Your insurance may be limited in the products it will cover so you will always have some amount of out-of-pocket expenses. Those could include copays, prescriptions, dental treatments, orthodontics, vision care and contacts or glasses, chiropractic, physical therapy, mental health treatment; the list goes on.
When you open an HSA or FSA, you’ll most likely receive a debit card which allows you to purchase eligible items directly. Alternatively, you can collect receipts from eligible purchases and submit them to your account provider for reimbursement.
HSA and FSA Contribution Limits
The IRS sets annual contribution limits for both FSA and HSA accounts.
In 2023, individuals can contribute up to $3,850 and families can contribute up to $7,750 to an HSA account. Due to high inflation, the IRS has raised the limit significantly for 2024, to $4,150 for individuals and $8,300 for families.
FSAs have slightly lower limits with a max contribution of $3,050 in 2023 and $3,200 in 2024. There is no family contribution or account option for an FSA.
What can you use HSA and FSA funds for?
Now that you’ve qualified, you understand the rules, and you’re ready to spend, what can you actually spend this money on and how do you do it? The IRS sets the list each year, and it’s recently expanded to include menstrual products and telehealth expenses via the CARES Act.
More traditional, expected expenses like your co-pays and lab fees (most things pertaining to your doctor’s visits, hospital stays, etcetera) and over-the-counter items at your local pharmacy are eligible by the IRS guidelines.
How can Flex help?
There are so many facets to your health and wellness that extend far beyond the pharmacist’s counter and the medical bills from your doctor. In fact, lifestyle interventions can have a significant impact on health on their own, or done in concert with medication or other interventions.
Flex enables consumers to use their HSA and FSA cards for products or services outside the doctor’s office, but that still have an impact on health conditions. This includes fitness programs and equipment, nutrition, mental health, sleep, at home testing, as well as the IRS approved OTC items.
Overview
Imagine you could reduce the cost of your out of pocket medical expenses and take advantage of tax benefits all at the same time? What if you could use funds designated for health on fitness, nutrition, or even sleep products or services that actually improve your health for the long term, instead of only treating the symptoms of illness?
Enter HSA and FSA accounts. Iff you're feeling confused or overwhelmed trying to understand HSA and FSAs, you’re not alone! Sixty-five percent of Americans struggle with the basic benefits and differences between these accounts.
Flex is here to help you understand all the most important aspects of HSAs and FSAs so you can make the right decisions for your health and finances.
What is an HSA?
A health savings account, or HSA, is a savings account set up exclusively for health related expenses.
The Benefits
HSA accounts are triple tax-advantaged, meaning there are three ways you can save money by leveraging these accounts. You as an individual own your HSA so funds stay with you year to year, even if you change jobs.
Tax Free Contributions - When you opt to open and contribute to an HSA, money is taken out of your paycheck pre-tax, lowering your tax burden overall.
Tax Free Growth - While you can keep cash sitting in your HSA, most accounts allow you to invest your money. This could be a good option if you don’t have current health related expenses but anticipate having expenses in the future. The percent of your account you’re allowed to invest and the exact investment vehicles vary depending on your account provider so if this is an area of interest, definitely investigate more!
Tax Free Withdrawals - When you spend money from your HSA on qualified expenses, you do so tax free. Should you accidentally spend HSA money on non-qualified expenses, you’ll owe taxes and pay a 20% penalty so always confirm eligibility before you buy. Once you reach the age of 65, the 20% penalty is waived for non-qualified expenses but the withdrawals will still be taxed.
How do I open an HSA?
In order to open an HSA, you need to have a high deductible health plan, or HDHP. For a health plan to qualify as high deductible, it must have a deductible of at least $1600 for an individual plan or $3200 for a family plan in 2024.
Unfortunately, you cannot open an HSA while on Medicare or if you’re claimed as a dependent on someone else's tax return.
HSAs are most commonly offered along with your healthcare plan through your employer but they don’t have to be. If you purchased a HDHP on the open market for example, you could go directly to an HSA provider and open an account directly. Several of the largest providers are Lively, HealthEquity, and Fidelity.
What is an FSA?
For this context, we’re going to be focused on a healthcare flexible savings account, or HC FSA. (There are other types of FSAs that we will not cover here, namely a dependent care FSA and limited expense FSA.)
The Benefits
Tax Free Contributions - When you opt to open and contribute to an FSA, money is taken out of your paycheck pre-tax, lowering your tax burden overall.
Tax Free Withdrawals - When you spend money from your FSA on qualified expenses, you do so tax free.
Be Aware
Unlike HSAs, FSAs are employer owned which means that for the most part, FSAs are use-it-or-lose-it. Any money in the account not used by the end of the calendar year, is forfeited.
Some employers will allow for a grace period during the first month or two of the new year but to be safe, plan to spend your funds by December 31st each year.
How do I open an FSA?
FSAs are employer owned so unfortunately you can’t set one up on your own in the same way you can an HSA.
If your employer does offer an FSA, opt in during open enrollment and decide how much you’d like to contribute to the account.
Why should you open an HSA or FSA?
So what’s the purpose or benefit of having an HSA or FSA? If you have health insurance, why would you need another plan or employer benefit for healthcare?
The long and short of it is that HSAs and FSAs can help you save money. On average, consumers save 30 to 40% percent on purchases they make with their HSA/FSA.
Even with health insurance, healthcare and health related spending can still be very expensive. Your insurance may be limited in the products it will cover so you will always have some amount of out-of-pocket expenses. Those could include copays, prescriptions, dental treatments, orthodontics, vision care and contacts or glasses, chiropractic, physical therapy, mental health treatment; the list goes on.
When you open an HSA or FSA, you’ll most likely receive a debit card which allows you to purchase eligible items directly. Alternatively, you can collect receipts from eligible purchases and submit them to your account provider for reimbursement.
HSA and FSA Contribution Limits
The IRS sets annual contribution limits for both FSA and HSA accounts.
In 2023, individuals can contribute up to $3,850 and families can contribute up to $7,750 to an HSA account. Due to high inflation, the IRS has raised the limit significantly for 2024, to $4,150 for individuals and $8,300 for families.
FSAs have slightly lower limits with a max contribution of $3,050 in 2023 and $3,200 in 2024. There is no family contribution or account option for an FSA.
What can you use HSA and FSA funds for?
Now that you’ve qualified, you understand the rules, and you’re ready to spend, what can you actually spend this money on and how do you do it? The IRS sets the list each year, and it’s recently expanded to include menstrual products and telehealth expenses via the CARES Act.
More traditional, expected expenses like your co-pays and lab fees (most things pertaining to your doctor’s visits, hospital stays, etcetera) and over-the-counter items at your local pharmacy are eligible by the IRS guidelines.
How can Flex help?
There are so many facets to your health and wellness that extend far beyond the pharmacist’s counter and the medical bills from your doctor. In fact, lifestyle interventions can have a significant impact on health on their own, or done in concert with medication or other interventions.
Flex enables consumers to use their HSA and FSA cards for products or services outside the doctor’s office, but that still have an impact on health conditions. This includes fitness programs and equipment, nutrition, mental health, sleep, at home testing, as well as the IRS approved OTC items.
Overview
Imagine you could reduce the cost of your out of pocket medical expenses and take advantage of tax benefits all at the same time? What if you could use funds designated for health on fitness, nutrition, or even sleep products or services that actually improve your health for the long term, instead of only treating the symptoms of illness?
Enter HSA and FSA accounts. Iff you're feeling confused or overwhelmed trying to understand HSA and FSAs, you’re not alone! Sixty-five percent of Americans struggle with the basic benefits and differences between these accounts.
Flex is here to help you understand all the most important aspects of HSAs and FSAs so you can make the right decisions for your health and finances.
What is an HSA?
A health savings account, or HSA, is a savings account set up exclusively for health related expenses.
The Benefits
HSA accounts are triple tax-advantaged, meaning there are three ways you can save money by leveraging these accounts. You as an individual own your HSA so funds stay with you year to year, even if you change jobs.
Tax Free Contributions - When you opt to open and contribute to an HSA, money is taken out of your paycheck pre-tax, lowering your tax burden overall.
Tax Free Growth - While you can keep cash sitting in your HSA, most accounts allow you to invest your money. This could be a good option if you don’t have current health related expenses but anticipate having expenses in the future. The percent of your account you’re allowed to invest and the exact investment vehicles vary depending on your account provider so if this is an area of interest, definitely investigate more!
Tax Free Withdrawals - When you spend money from your HSA on qualified expenses, you do so tax free. Should you accidentally spend HSA money on non-qualified expenses, you’ll owe taxes and pay a 20% penalty so always confirm eligibility before you buy. Once you reach the age of 65, the 20% penalty is waived for non-qualified expenses but the withdrawals will still be taxed.
How do I open an HSA?
In order to open an HSA, you need to have a high deductible health plan, or HDHP. For a health plan to qualify as high deductible, it must have a deductible of at least $1600 for an individual plan or $3200 for a family plan in 2024.
Unfortunately, you cannot open an HSA while on Medicare or if you’re claimed as a dependent on someone else's tax return.
HSAs are most commonly offered along with your healthcare plan through your employer but they don’t have to be. If you purchased a HDHP on the open market for example, you could go directly to an HSA provider and open an account directly. Several of the largest providers are Lively, HealthEquity, and Fidelity.
What is an FSA?
For this context, we’re going to be focused on a healthcare flexible savings account, or HC FSA. (There are other types of FSAs that we will not cover here, namely a dependent care FSA and limited expense FSA.)
The Benefits
Tax Free Contributions - When you opt to open and contribute to an FSA, money is taken out of your paycheck pre-tax, lowering your tax burden overall.
Tax Free Withdrawals - When you spend money from your FSA on qualified expenses, you do so tax free.
Be Aware
Unlike HSAs, FSAs are employer owned which means that for the most part, FSAs are use-it-or-lose-it. Any money in the account not used by the end of the calendar year, is forfeited.
Some employers will allow for a grace period during the first month or two of the new year but to be safe, plan to spend your funds by December 31st each year.
How do I open an FSA?
FSAs are employer owned so unfortunately you can’t set one up on your own in the same way you can an HSA.
If your employer does offer an FSA, opt in during open enrollment and decide how much you’d like to contribute to the account.
Why should you open an HSA or FSA?
So what’s the purpose or benefit of having an HSA or FSA? If you have health insurance, why would you need another plan or employer benefit for healthcare?
The long and short of it is that HSAs and FSAs can help you save money. On average, consumers save 30 to 40% percent on purchases they make with their HSA/FSA.
Even with health insurance, healthcare and health related spending can still be very expensive. Your insurance may be limited in the products it will cover so you will always have some amount of out-of-pocket expenses. Those could include copays, prescriptions, dental treatments, orthodontics, vision care and contacts or glasses, chiropractic, physical therapy, mental health treatment; the list goes on.
When you open an HSA or FSA, you’ll most likely receive a debit card which allows you to purchase eligible items directly. Alternatively, you can collect receipts from eligible purchases and submit them to your account provider for reimbursement.
HSA and FSA Contribution Limits
The IRS sets annual contribution limits for both FSA and HSA accounts.
In 2023, individuals can contribute up to $3,850 and families can contribute up to $7,750 to an HSA account. Due to high inflation, the IRS has raised the limit significantly for 2024, to $4,150 for individuals and $8,300 for families.
FSAs have slightly lower limits with a max contribution of $3,050 in 2023 and $3,200 in 2024. There is no family contribution or account option for an FSA.
What can you use HSA and FSA funds for?
Now that you’ve qualified, you understand the rules, and you’re ready to spend, what can you actually spend this money on and how do you do it? The IRS sets the list each year, and it’s recently expanded to include menstrual products and telehealth expenses via the CARES Act.
More traditional, expected expenses like your co-pays and lab fees (most things pertaining to your doctor’s visits, hospital stays, etcetera) and over-the-counter items at your local pharmacy are eligible by the IRS guidelines.
How can Flex help?
There are so many facets to your health and wellness that extend far beyond the pharmacist’s counter and the medical bills from your doctor. In fact, lifestyle interventions can have a significant impact on health on their own, or done in concert with medication or other interventions.
Flex enables consumers to use their HSA and FSA cards for products or services outside the doctor’s office, but that still have an impact on health conditions. This includes fitness programs and equipment, nutrition, mental health, sleep, at home testing, as well as the IRS approved OTC items.
Overview
Imagine you could reduce the cost of your out of pocket medical expenses and take advantage of tax benefits all at the same time? What if you could use funds designated for health on fitness, nutrition, or even sleep products or services that actually improve your health for the long term, instead of only treating the symptoms of illness?
Enter HSA and FSA accounts. Iff you're feeling confused or overwhelmed trying to understand HSA and FSAs, you’re not alone! Sixty-five percent of Americans struggle with the basic benefits and differences between these accounts.
Flex is here to help you understand all the most important aspects of HSAs and FSAs so you can make the right decisions for your health and finances.
What is an HSA?
A health savings account, or HSA, is a savings account set up exclusively for health related expenses.
The Benefits
HSA accounts are triple tax-advantaged, meaning there are three ways you can save money by leveraging these accounts. You as an individual own your HSA so funds stay with you year to year, even if you change jobs.
Tax Free Contributions - When you opt to open and contribute to an HSA, money is taken out of your paycheck pre-tax, lowering your tax burden overall.
Tax Free Growth - While you can keep cash sitting in your HSA, most accounts allow you to invest your money. This could be a good option if you don’t have current health related expenses but anticipate having expenses in the future. The percent of your account you’re allowed to invest and the exact investment vehicles vary depending on your account provider so if this is an area of interest, definitely investigate more!
Tax Free Withdrawals - When you spend money from your HSA on qualified expenses, you do so tax free. Should you accidentally spend HSA money on non-qualified expenses, you’ll owe taxes and pay a 20% penalty so always confirm eligibility before you buy. Once you reach the age of 65, the 20% penalty is waived for non-qualified expenses but the withdrawals will still be taxed.
How do I open an HSA?
In order to open an HSA, you need to have a high deductible health plan, or HDHP. For a health plan to qualify as high deductible, it must have a deductible of at least $1600 for an individual plan or $3200 for a family plan in 2024.
Unfortunately, you cannot open an HSA while on Medicare or if you’re claimed as a dependent on someone else's tax return.
HSAs are most commonly offered along with your healthcare plan through your employer but they don’t have to be. If you purchased a HDHP on the open market for example, you could go directly to an HSA provider and open an account directly. Several of the largest providers are Lively, HealthEquity, and Fidelity.
What is an FSA?
For this context, we’re going to be focused on a healthcare flexible savings account, or HC FSA. (There are other types of FSAs that we will not cover here, namely a dependent care FSA and limited expense FSA.)
The Benefits
Tax Free Contributions - When you opt to open and contribute to an FSA, money is taken out of your paycheck pre-tax, lowering your tax burden overall.
Tax Free Withdrawals - When you spend money from your FSA on qualified expenses, you do so tax free.
Be Aware
Unlike HSAs, FSAs are employer owned which means that for the most part, FSAs are use-it-or-lose-it. Any money in the account not used by the end of the calendar year, is forfeited.
Some employers will allow for a grace period during the first month or two of the new year but to be safe, plan to spend your funds by December 31st each year.
How do I open an FSA?
FSAs are employer owned so unfortunately you can’t set one up on your own in the same way you can an HSA.
If your employer does offer an FSA, opt in during open enrollment and decide how much you’d like to contribute to the account.
Why should you open an HSA or FSA?
So what’s the purpose or benefit of having an HSA or FSA? If you have health insurance, why would you need another plan or employer benefit for healthcare?
The long and short of it is that HSAs and FSAs can help you save money. On average, consumers save 30 to 40% percent on purchases they make with their HSA/FSA.
Even with health insurance, healthcare and health related spending can still be very expensive. Your insurance may be limited in the products it will cover so you will always have some amount of out-of-pocket expenses. Those could include copays, prescriptions, dental treatments, orthodontics, vision care and contacts or glasses, chiropractic, physical therapy, mental health treatment; the list goes on.
When you open an HSA or FSA, you’ll most likely receive a debit card which allows you to purchase eligible items directly. Alternatively, you can collect receipts from eligible purchases and submit them to your account provider for reimbursement.
HSA and FSA Contribution Limits
The IRS sets annual contribution limits for both FSA and HSA accounts.
In 2023, individuals can contribute up to $3,850 and families can contribute up to $7,750 to an HSA account. Due to high inflation, the IRS has raised the limit significantly for 2024, to $4,150 for individuals and $8,300 for families.
FSAs have slightly lower limits with a max contribution of $3,050 in 2023 and $3,200 in 2024. There is no family contribution or account option for an FSA.
What can you use HSA and FSA funds for?
Now that you’ve qualified, you understand the rules, and you’re ready to spend, what can you actually spend this money on and how do you do it? The IRS sets the list each year, and it’s recently expanded to include menstrual products and telehealth expenses via the CARES Act.
More traditional, expected expenses like your co-pays and lab fees (most things pertaining to your doctor’s visits, hospital stays, etcetera) and over-the-counter items at your local pharmacy are eligible by the IRS guidelines.
How can Flex help?
There are so many facets to your health and wellness that extend far beyond the pharmacist’s counter and the medical bills from your doctor. In fact, lifestyle interventions can have a significant impact on health on their own, or done in concert with medication or other interventions.
Flex enables consumers to use their HSA and FSA cards for products or services outside the doctor’s office, but that still have an impact on health conditions. This includes fitness programs and equipment, nutrition, mental health, sleep, at home testing, as well as the IRS approved OTC items.
Flex is a modern marketplace for consumers to discover and purchase HSA/FSA eligible products. From fitness and nutrition, to sleep and mental health, Flex takes a holistic view of healthcare and enables consumers to use their pre-tax money to do the same.