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

Taking Charge of Our Well-Being Amidst the hustle and bustle, it’s easy to overlook one of our most valuable assets—our health. Let’s take a moment to reflect on the importance of preventive healthcare because prevention truly is the best medicine for our well-being. What exactly is preventive healthcare? Well, it’s all about staying ahead of […]
Read more
Need help deciding on benefits? Just call your Health Advocate! Have you ever had a question about your benefits? Honestly, who hasn’t? Nextep Health Advocate program can help. Health Advocate is the nation’s leading healthcare advocacy and assistance company. Their experts help employees and their family members navigate the healthcare system, resolve healthcare and insurance […]
Read more
Empowering Employees to Take Control of Healthcare Expenses Healthcare costs can be a real burden on your wallet, affecting your finances and overall well-being. But don’t worry! With planning and proactive steps, you can take control and save money on your healthcare expenses.  Know Your Health Insurance: First, make sure you understand your health insurance […]
Read more
Did you know that mental health assistance is among the most sought-after employee benefits? (Source: Forbes) Nextep’s Aetna health plans are committed to providing comprehensive coverage for your mental and behavioral health needs. Let’s explore how we can support your healthier mind and body journey using your health benefits. Your mental health is a crucial […]
Read more
Exploring the Benefits of a Health Reimbursement Arrangement (HRA) You may have heard about a health reimbursement arrangement (HRA) as a money-saving option for your benefits, but what exactly is it? Is it right for your company? Let’s break it down. An HRA is a benefit plan where you, as the employer, cover a set […]
Read more
Republished with permission from Health Advocate Pride month is celebrated in June in honor of the 1969 Stonewall uprising in New York City. During that event, the LGBTQIA+ community protested for the right to socialize without harassment.  Today, Pride celebrations continue globally as jubilant expressions of how far the LGBTQIA+ community has come. The events […]
Read more
On January 30, 2023, the federal government announced that the two national emergencies addressing COVID-19, the public health emergency (PHE) and the national emergency, will end on May 11, 2023.  Starting May 12, 2023, health plans and group plan sponsors will no longer be subject to federal requirements for coverage of COVID-19 testing, vaccinations, and […]
Read more
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

Download Our App