11/2/2018 4:00:00 PM | Career Path, Money Matters

Medical Costs Can Add Up—Use a Health Savings Plan to Get More

Save on medical costs with an HSA or FSA

With open enrollment upon us, now is a great time to evaluate your health care coverage. Are you getting the most out of yours? If you’re looking for additional ways to protect both your health and your finances, enrolling in a health savings account (HSA) or flexible spending account (FSA) can be a great way to go.

Here’s how these valuable benefits can help you get more out of your health care dollars.


HSA and FSA 101

You’ve probably heard both acronyms tossed around during open enrollment, but do you know what they mean? In some ways, a health savings account and a flexible spending account are very similar: they’re both accounts you can contribute to tax-free to save for medical costs. In other ways, they’re very different. Here’s how:

A health savings account (HSA) is available to people who have a high-deductible health plan. For individuals who qualify, the maximum contribution in 2018 is $3,450, and $6,900 for family coverage. With an HSA, you can change your contribution amount at any time. Unused balances roll over into the next year (You can learn more about the benefits here).

A flexible spending account (FSA) has no eligibility requirements, which makes it more accessible. However, contributions are capped at $2,650 a year, and your contribution can only be adjusted at open enrollment.  It’s also worth noting that if you don’t use the balance by the end of the year, you’ll lose it. Contributions to your FSA are taken out of your paycheck before taxes, which reduces your taxable income.

Things like flexibility in contributions, the ability to keep your unused balance and additional tax benefits generally make a HSA the wisest choice if you’re eligible. Still, either account can save you money and make it easier to budget for out-of-pocket medical costs.


Making the most of your account

Whether you have an FSA or an HSA, both accounts can be used for what the IRS considers to be “qualified medical expenses.” By socking money away throughout the year, it’s there to help cushion the cost whenever you need wellness services. These can range from everything from prescription drugs to preventative care—and even a few services you may not have considered.

Here are a few ways you can use your account to get more bang for your buck—and boost your health while you’re at it.


Ditch a bad habit

If you work with your doctor to quit smoking, stop drinking, or lose weight for a medical condition, then those expenses may qualify for reimbursement through your FSA or HSA. If you’re coming up on the end of your FSA year, it might be a good time to talk to your doctor about booking those services now.


Fill your prescriptions

Out-of-pocket costs for prescription drugs that weren’t reimbursed by your insurance may be used as a qualifying expense for an HSA or FSA. If you’re coming up on the end of the year and have extra FSA money to spend, you can ask your doctor about filling prescriptions ahead of time for the coming year (though it will depend on their recommendation and the particular prescription).


Get screened

The Affordable Care Act offers many preventative and screening tests at no out-of-pocket cost. However, there may be some tests that aren’t covered that you may want because of pre-existing conditions or family history. If you’re getting close to the end of the year and have extra FSA money in your account, ask your doctor which tests you can move into the current year.


Stock up on batteries

If you need batteries for your hearing aid, your glucose meter or any other piece of equipment that supports your health or a medical condition, then you can be reimbursed for them through your HSA or FSA. Keep the receipts and be sure to document what the batteries are used for. 


Increase your access

Can a home improvement qualify as a medical expense? Actually, it can. If your doctor prescribes that you make modifications to your home to accommodate a medical problem you have, then those expenses can be reimbursed by your FSA or HSA.

Improvements like these usually require some extra paperwork to qualify for reimbursement. Railings, support bars, modifying doorways, building an entry ramp—as long they’re needed to improve your access because of a medical or physical challenge, then they qualify.


Pay for glasses, contacts, or even eye surgery

Whether you wear contact lenses, glasses, or choose Lasik or other eye surgeries, vision correction is considered a qualifying medical expense as long as it hasn’t been paid for through your insurance or your employer. If you’re coming to the end of the year, consider buying extra sets of contact lenses or an extra pair of glasses if you need to use up funds. 

Even if you’re not trying to use up a balance by December 31st, you can still take advantage of these options to make health care more affordable all year long.

Every financial advantage helps when it comes to health care. We can help you set up a Health Savings Account that earns interest and includes checks and debit cards for easy access to your funds. To get started, contact us today.