The Advantages of FSA & HSA

Fsa Mobile

It’s time to prepare for next year’s medical expenses, but it can be tough to know how much to set aside. 

That’s one advantage of enrolling in a flexible spending account (FSA) or a health savings account (HSA). It allows you to prepare for expected and unexpected medical expenses.

An FSA and HSA allow you to pay for things you are likely already spending money on with tax-free dollars since the funds are taken out of your paycheck before taxes. There are tons of eligible expenses for tax-free purchase with FSA and HSA funds, including prescriptions, doctor’s office copays, health insurance deductibles, coinsurance, and many over-the-counter treatments.

You can also get everyday products like allergy meds, bandages, and more. Visit fsastore.com or hsastore.com to shop for eligible items. Here’s a list of a few other qualified expenses:

    • Blood pressure monitoring device
    • Dental services
    • Eye examination, eyeglasses, or contact lenses 
    • Family planning items
    • Lab fees
    • Weight-loss programs
    • Wheelchair, walkers, crutches, and canes

For a complete list of eligible medical expenses, see IRS Publication 502

You can’t have both an FSA and HSA, but there are advantages to both.

For those with an FSA, one benefit is having access to your entire annual amount on the first day of the plan year* (for Nextep clients, that’s January 1.) However, unlike an HSA, the FSA funds are “use it or lose it.” You can rollover up to $550 to the following plan year. You can also read more about FSA limits here.

To have an HSA, you must be enrolled in a qualified high-deductible health plan (HDHP), not be covered by secondary health insurance or Medicare, and not be someone’s dependent. Unlike an FSA, funds in your HSA don’t expire. Any unused dollars in your HSA roll over from year to year, making it easier to save and invest in your future. We suggest you check with your financial advisor or institute to learn more about your investment options with an HSA. 

You can read more about if an HSA is right for you by reading our blog: HSA – Should You Have One?

*The IRS excludes this feature for dependent care accounts.

Also on Nextep

Is your pet insured? How about your identity? We all know the value of the major benefits, such as health, dental, vision, life, telehealth, and disability. But what about some of the lesser-known benefits? You and your employees may be missing out on some significant advantages. Pet Insurance Protect your pets with pet insurance options. […]
Read more
Federally-Approved Qualifying Events You may have heard the term “federally-approved qualifying event” when making changes to your health benefits outside the open enrollment window. Here’s a quick rundown of what that means. Any tax-free employee benefits fall under Section 125 of the IRS code. Because the IRS regulates these benefits, employees are only permitted to […]
Read more
8 Easy Ways to Save Money on Health Care Costs Admittedly, there are many things out of your control when it comes to healthcare costs. But, there are still steps you can take that add up to more dollars in your pocket. Following these tips can help save money on health care costs. Use preventive […]
Read more
Virtual doctor visits via telehealth are on the rise We’ve long touted the benefits of telehealth. These virtual doctor visits, conducted via phone or video rather than in-person, are a great way to get help for several health issues. Commonly handled diagnoses include Allergies Bronchitis Earache Sore throat Sinusitis Tobacco cessation Pink eye Strep throat […]
Read more
At Nextep, we know the end of the year brings taxes top of mind for many. It also may be easy to forget about 2023 benefit limits that can impact your taxes.  Partnering with a PEO like Nextep means you can easily get all the details you need. Here is a cheat sheet of some […]
Read more
The IRS has released FSA and HSA limits for 2023. A flexible spending account (FSA) allows you to deduct a set amount of pre-tax money from each paycheck to pay for certain IRS-qualified out-of-pocket health expenses, such as medical copays, dependent care, prescription drugs, transit, and parking. Aside from the annually allowed rollover amount ($610 in […]
Read more
While Nextep always offered personalized benefit support to your people, we’re taking it to a whole new level with Health Advocate! Nextep clients and their employees will always get an optimal benefits experience with one-on-one consultations to manage their health questions.  “I’ve personally experienced the headache of trying to choose the right benefit plan for […]
Read more
Finding a PEO can be a daunting task. You should feel confident in your partnership with Nextep or any PEO for that matter. To ensure you do, we’ve put together a short checklist of questions to ask in your meetings with PEOs.  1. What accreditations and certifications do you hold?  A few credentials you’ll want […]
Read more
“[Switching to] Nextep was a no-brainer. The costs are better and the amount of personalized attention and follow-up we received right off the bat was really impressive. With Nextep, we’re not just a number. Nextep is so responsive to our questions and our needs. We didn’t have that in the past with our previous provider.” — Yaicha, […]
Read more
Telehealth services like Teladoc® can provide 24/7/365 access to a doctor by web, phone, or mobile app.  Whether you have a minor illness or a chronic condition, telehealth has become an essential tool for many employees by saving them time and money. A National Library of Medicine study shows people using their telehealth are more engaged in their health care. […]
Read more
With a vast range of individual and family situations, it’s essential to provide benefits that meet your employees’ needs wherever they are in life.  Much like your workplace policies, your employee benefits should align with your diversity and inclusion (D&I) goals. Look at your benefits annually and ask yourself if they reflect your workforce’s needs, […]
Read more
Even before the pandemic, no one wanted to sit in a doctor’s waiting room feeling ill or with a sick child.  Now, with COVID-19 cases on the rise and winter’s seasonal illnesses upon us, it’s more important than ever to have a telehealth option for your employees.  At Nextep, we partner with Teladoc® to offer […]
Read more

Download Our App