How to make the most of your FSA and HSA accounts this year

This might be a more exciting topic, but it can make a huge difference in your finances: FSAs (Flexible Spending Accounts) and HSAs (Health Savings Accounts). Let’s break it down in a way that’s as easy to digest as your morning coffee.

What’s the big deal about FSAs and HSAs?

First things first, if you’ve got these accounts, you’re already winning at life! Both FSAs and HSAs help you set aside pre-tax dollars to use for medical expenses. In plain language, that means you’re saving money because you’re not taxed on the amount you contribute to these accounts.

FSA: Employers usually offer these accounts and let you use funds for eligible medical expenses throughout the year. But, there’s a catch—most FSAs have a “use it or lose it” rule, meaning if you don’t spend your funds by the end of the plan year (or grace period), that money vanishes.

HSA: If you have a high-deductible health plan (HDHP), you’re eligible for an HSA. The best part? HSA funds roll over year after year and can even be invested to grow tax-free, like a retirement account. It’s basically the superhero of health savings!

Use it before you lose it: FSA strategies

1. Plan for big-ticket items: Have you or your kids been putting off dental work or new glasses? Now’s the time to schedule those appointments.
2. Stock up on eligible essentials: Think first aid kits (hey, accidents happen!), over-the-counter meds, and even items like sunscreen and heating pads. A quick check online will give you a complete list of eligible items.
3. Use your account for childcare expenses: If your FSA allows for dependent care, that’s a great way to cover preschool, daycare, or after-school programs.

And speaking of first-aid kits, did you know that KEEP>GOING First Aid Kits are FSA and HSA eligible? You can use your FSA or HSA card to pay for one directly, or if needed, we’re happy to send you an invoice for reimbursement. It’s a smart way to be prepared for whatever life (or your kids) throws your way and they make fun thoughtful presents.

HSA: the gift that keeps on giving

HSAs are a bit more flexible. Here’s how you can leverage yours:

1. Think long-term: Unlike FSAs, your HSA funds don’t disappear at the end of the year. If you don’t need to use all of it now, let it grow! The money can be invested and grow tax-free for future health expenses or even as a retirement safety net.

2. Use it smartly: You can pay for medical expenses with after-tax money and reimburse yourself later from your HSA, which means you let those funds grow as long as possible before touching them.

3. Save on non-medical expenses after 65: Once you hit 65, you can withdraw HSA funds for non-medical purposes without penalties (you’ll just pay regular income tax). So, think of it as an extra boost to your retirement savings!

A few quick reminders

- Keep your receipts: Whether it’s for a doctor’s appointment or that thermometer you picked up at the pharmacy, hold onto proof of purchase. You’ll need it in case the IRS comes knocking.

- Double-check eligible expenses: The rules can change, and not everything qualifies. It’s a good idea to check your FSA or HSA website for the most up-to-date list of eligible items.

- Review your balance: For FSA users, set a calendar reminder a couple of months before the end of the plan year to see how much you have left and plan accordingly.

Final thoughts

Making the most of your FSA and HSA accounts doesn’t have to be overwhelming. With a little planning, you can take advantage of these tax-free benefits and make them work for your family’s needs. Whether it’s that surprise visit to the ER because your toddler decided to “fly” off the couch or just a simple stash up on our First Aid Kits, these accounts can help you cover it without added stress. 

All our products are FSA/ HSA eligible. Shop now.