HSA/FSA
Your 2025 Open Enrollment Cheat Sheet: 7 Terms You Actually Need to Know
Confused by health benefits jargon during open enrollment? This quick 2025 cheat sheet breaks down 7 essential terms like deductibles, copays, HSAs, and FSAs so you can choose a plan that fits your needs and save smart with confidence.
October 27, 2025
Sam O'Keefe
Co-founder & CEO of Flex
Overview
Overview
Overview
It’s almost that time of year again—open enrollment season. From November 1, 2025 through January 15, 2026, you can choose or update your health insurance and benefits for the year ahead.
If you’re eligible for health insurance through your employer, you may have just a couple of coverage options to choose from. If you need to buy insurance independently through the Affordable Care Act (ACA) Marketplace, you may have access to dozens of insurance options—but at many different price points and coverage levels.
To build a smart strategy around choosing a healthcare plan, it’s important to pay attention to all the fine print to calculate the total cost and value of every plan you’re considering. But that’s tough to do if you’re not familiar with insurance companies’ terminology.
In this piece, we’ll take a look at seven common terms that you’re likely to see in your description of benefits—and help you understand how each term applies to your real-world healthcare costs.
1. Premium
Think of this as your subscription fee for insurance. It’s the amount you pay (usually monthly) to keep your plan active—whether or not you use it.
If you’re covered for insurance by an employer (whether your own, your partner’s, or a parent’s), the employer will generally cover a significant portion of the monthly premium costs: Depending on the type of employer, they cover anywhere from 81% to 87% of premium costs on average. Employees generally pay their share of premium expenses directly out of their paychecks.
Buying on the marketplace? Then your premium is likely dependent on your income bracket. Individuals and families may qualify for premium tax credits based on income, with expanded eligibility under the ACA allowing subsidies above 400% of the federal poverty level through 2025.
2. Deductible
This is the amount you have to pay out of pocket before your insurance company starts helping with costs. After meeting your deductible, you’ll typically pay a smaller portion of covered costs (known as coinsurance) until you reach your out-of-pocket maximum.
Look at your plan’s summary of coverage to understand when the deductible comes into play. For some plans (particularly those that are HSA-compatible), all healthcare costs are applied to the deductible, and the insurance benefits don’t kick in until you’ve hit your deductible limit. For others, the deductible only applies to certain healthcare services, such as medical testing or surgical procedures, while your costs for others (i.e., a specialist consult) are limited to your co-pay amount.
If you’re on a high-deductible plan, consider using your HSA funds through Flex to cover eligible out-of-pocket costs before you hit your deductible—saving you tax-free money on every dollar spent.
3. Copayment (Co-pay)
Your copayment (or co-pay) refers to a flat fee you pay for certain services. For instance, your plan may allow PCP visits for $25 each and specialist visits for $75 each, with a $15 per-item cap on generic prescription drug costs. Copays are FSA/HSA-eligible expenses, so you can pay for them out of pre-tax savings without dipping into your regular checking balance.
Choosing a plan with low co-pays means that you’ll be able to budget easily for regular doctors’ visits and medication costs—so it’s a good idea to choose this type of plan if you have health conditions that you need to regularly treat and monitor. That said, for health expenses that aren’t subject to a copay, you’ll need to ensure that you have room in your budget to cover costs up to your out-of-pocket max.
4. Coinsurance
After you hit your deductible, you and your insurance split costs by a pre-arranged percentage, known as coinsurance. You’ll share these costs according to your coinsurance rate, until you reach your out-of-pocket maximum. You can use your HSA or FSA to pay your share of coinsurance, helping you meet your OOP max with pre-tax dollars.
For example, let’s say you’ve just had surgery to remove your appendix. Your plan’s deductible is $1,000, your out-of-pocket max is $3,000, and you haven’t spent anything towards your plan yet this year. Your insurance company’s coinsurance rate is 80% for costs after you meet your deductible.
If the hospital bills your insurance $6,800 for the surgery, here’s how that breaks down:
Deductible: $1,000 (your share)
Co-insurance:
20% of $5,800 = $1160 (your share)
80% of $5,800 = $4,640 (plan’s share)
In total, you’d pay $2,160 towards the costs of surgery, while your plan would pay $4,640.
5. Out-of-Pocket Maximum
This is your financial safety net. Once you hit this number in a year (deductible + copays + coinsurance), your insurance covers the rest at 100%.
Let’s say the hospital bill for your surgery was $13,000 instead of $6,800. In this case, you’d reach your out-of-pocket maximum before paying your full coinsurance amount:
Deductible: $1,000 (your share)
Coinsurance: 20% of the remaining $12,000 is $2,400, but you’re only responsible for $2,000 before hitting your $3,000 out-of-pocket maximum.
In total, you’d pay $3,000, and your insurance would cover the remaining $10,000.
6. Network / In-Network vs. Out-of-Network
Pay close attention to your health plan’s provider network when picking a plan. Insurers will only commit to contracted rates for in-network providers. If you go out-of-network, you’ll pay a lot more—and may not even be eligible for insurance coverage at all.
Take extra care when traveling out of your local region. If your plan doesn’t offer nationwide or international coverage, consider separate travel insurance for peace of mind.
7. FSA (Flexible Spending Account) / HSA (Health Savings Account)
These two types of savings accounts enable you to set aside pre-tax money to pay for healthcare expenses, but they have some key differences:
FSA: Employer-sponsored. You can stash away pre-tax money for health expenses, but most of it has to be used by year’s end. In 2026, you can contribute $3,300, and $660 can be carried over from this year.
HSA: Available if you’re on a high-deductible plan. Pre-tax contributions, tax-free growth, and funds roll over every year—it’s like a 401k for health care. In 2026, you can contribute $4,400 per individual or $8,750 per family (+$1,000 catch-up if you’re 55 or older).
You cannot use these funds to pay your healthcare premiums, but you can use them to cover the cost of healthcare expenses—including co-pays, prescriptions, and medical bills that apply towards your deductible. You can also use them towards over-the-counter drugs and other healthcare-related expenses, including some qualifying consumer products if you have a letter of medical necessity from a doctor.
This is where Flex makes life easier. Our marketplace curates thousands of FSA- and HSA-eligible products—no receipts, no guessing. From preventive health tools to recovery and stress-relief gear, Flex helps you spend smarter (and faster) before your balance expires—with pre-tax savings on your purchases of up to 40%.
How to Win Open Enrollment Season
Do the math: The cheapest premium isn’t always the best deal—look at your likely healthcare needs.
Check your fave providers: Make sure your go-to doctor or clinic is in-network.
Plan for your year: Got a surgery, new meds, or a big life event coming up? Pick a plan that sets you up for success.
Take advantage of tax perks: If your employer offers FSA/HSA matching, don’t leave free money on the table. Check out the Flex marketplace to find all the eligible products and services you can use your pre-tax dollars on.
It’s almost that time of year again—open enrollment season. From November 1, 2025 through January 15, 2026, you can choose or update your health insurance and benefits for the year ahead.
If you’re eligible for health insurance through your employer, you may have just a couple of coverage options to choose from. If you need to buy insurance independently through the Affordable Care Act (ACA) Marketplace, you may have access to dozens of insurance options—but at many different price points and coverage levels.
To build a smart strategy around choosing a healthcare plan, it’s important to pay attention to all the fine print to calculate the total cost and value of every plan you’re considering. But that’s tough to do if you’re not familiar with insurance companies’ terminology.
In this piece, we’ll take a look at seven common terms that you’re likely to see in your description of benefits—and help you understand how each term applies to your real-world healthcare costs.
1. Premium
Think of this as your subscription fee for insurance. It’s the amount you pay (usually monthly) to keep your plan active—whether or not you use it.
If you’re covered for insurance by an employer (whether your own, your partner’s, or a parent’s), the employer will generally cover a significant portion of the monthly premium costs: Depending on the type of employer, they cover anywhere from 81% to 87% of premium costs on average. Employees generally pay their share of premium expenses directly out of their paychecks.
Buying on the marketplace? Then your premium is likely dependent on your income bracket. Individuals and families may qualify for premium tax credits based on income, with expanded eligibility under the ACA allowing subsidies above 400% of the federal poverty level through 2025.
2. Deductible
This is the amount you have to pay out of pocket before your insurance company starts helping with costs. After meeting your deductible, you’ll typically pay a smaller portion of covered costs (known as coinsurance) until you reach your out-of-pocket maximum.
Look at your plan’s summary of coverage to understand when the deductible comes into play. For some plans (particularly those that are HSA-compatible), all healthcare costs are applied to the deductible, and the insurance benefits don’t kick in until you’ve hit your deductible limit. For others, the deductible only applies to certain healthcare services, such as medical testing or surgical procedures, while your costs for others (i.e., a specialist consult) are limited to your co-pay amount.
If you’re on a high-deductible plan, consider using your HSA funds through Flex to cover eligible out-of-pocket costs before you hit your deductible—saving you tax-free money on every dollar spent.
3. Copayment (Co-pay)
Your copayment (or co-pay) refers to a flat fee you pay for certain services. For instance, your plan may allow PCP visits for $25 each and specialist visits for $75 each, with a $15 per-item cap on generic prescription drug costs. Copays are FSA/HSA-eligible expenses, so you can pay for them out of pre-tax savings without dipping into your regular checking balance.
Choosing a plan with low co-pays means that you’ll be able to budget easily for regular doctors’ visits and medication costs—so it’s a good idea to choose this type of plan if you have health conditions that you need to regularly treat and monitor. That said, for health expenses that aren’t subject to a copay, you’ll need to ensure that you have room in your budget to cover costs up to your out-of-pocket max.
4. Coinsurance
After you hit your deductible, you and your insurance split costs by a pre-arranged percentage, known as coinsurance. You’ll share these costs according to your coinsurance rate, until you reach your out-of-pocket maximum. You can use your HSA or FSA to pay your share of coinsurance, helping you meet your OOP max with pre-tax dollars.
For example, let’s say you’ve just had surgery to remove your appendix. Your plan’s deductible is $1,000, your out-of-pocket max is $3,000, and you haven’t spent anything towards your plan yet this year. Your insurance company’s coinsurance rate is 80% for costs after you meet your deductible.
If the hospital bills your insurance $6,800 for the surgery, here’s how that breaks down:
Deductible: $1,000 (your share)
Co-insurance:
20% of $5,800 = $1160 (your share)
80% of $5,800 = $4,640 (plan’s share)
In total, you’d pay $2,160 towards the costs of surgery, while your plan would pay $4,640.
5. Out-of-Pocket Maximum
This is your financial safety net. Once you hit this number in a year (deductible + copays + coinsurance), your insurance covers the rest at 100%.
Let’s say the hospital bill for your surgery was $13,000 instead of $6,800. In this case, you’d reach your out-of-pocket maximum before paying your full coinsurance amount:
Deductible: $1,000 (your share)
Coinsurance: 20% of the remaining $12,000 is $2,400, but you’re only responsible for $2,000 before hitting your $3,000 out-of-pocket maximum.
In total, you’d pay $3,000, and your insurance would cover the remaining $10,000.
6. Network / In-Network vs. Out-of-Network
Pay close attention to your health plan’s provider network when picking a plan. Insurers will only commit to contracted rates for in-network providers. If you go out-of-network, you’ll pay a lot more—and may not even be eligible for insurance coverage at all.
Take extra care when traveling out of your local region. If your plan doesn’t offer nationwide or international coverage, consider separate travel insurance for peace of mind.
7. FSA (Flexible Spending Account) / HSA (Health Savings Account)
These two types of savings accounts enable you to set aside pre-tax money to pay for healthcare expenses, but they have some key differences:
FSA: Employer-sponsored. You can stash away pre-tax money for health expenses, but most of it has to be used by year’s end. In 2026, you can contribute $3,300, and $660 can be carried over from this year.
HSA: Available if you’re on a high-deductible plan. Pre-tax contributions, tax-free growth, and funds roll over every year—it’s like a 401k for health care. In 2026, you can contribute $4,400 per individual or $8,750 per family (+$1,000 catch-up if you’re 55 or older).
You cannot use these funds to pay your healthcare premiums, but you can use them to cover the cost of healthcare expenses—including co-pays, prescriptions, and medical bills that apply towards your deductible. You can also use them towards over-the-counter drugs and other healthcare-related expenses, including some qualifying consumer products if you have a letter of medical necessity from a doctor.
This is where Flex makes life easier. Our marketplace curates thousands of FSA- and HSA-eligible products—no receipts, no guessing. From preventive health tools to recovery and stress-relief gear, Flex helps you spend smarter (and faster) before your balance expires—with pre-tax savings on your purchases of up to 40%.
How to Win Open Enrollment Season
Do the math: The cheapest premium isn’t always the best deal—look at your likely healthcare needs.
Check your fave providers: Make sure your go-to doctor or clinic is in-network.
Plan for your year: Got a surgery, new meds, or a big life event coming up? Pick a plan that sets you up for success.
Take advantage of tax perks: If your employer offers FSA/HSA matching, don’t leave free money on the table. Check out the Flex marketplace to find all the eligible products and services you can use your pre-tax dollars on.
Flex is the easiest way for direct to consumer brands and retailers to accept HSA/FSA for their 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.