How to Use FSA and HSA Benefits Before the Year Ends
Health insurance offers year-round benefits that provide extra help when you need it the most. But you will also want to get the most from your vision care before the year ends, especially if those benefits do not roll over to the next year.
As December approaches and the holiday season settles in, it is easy to devote time and money to other priorities. But being familiar with flexible spending accounts (FSA) and health savings accounts (HSA) can help maximize your benefits before year’s end.
Flexible Spending Account
Offered by many employers, a flexible spending account can be the extra help you need to pay for your medical expenses. You will want to make use of it before December 31st since FSA savings do not roll over to the new year.
The amount accumulated in this account is dependent on the amount of money you decide to contribute toward it. This money is deducted from your salary before income taxes, and in turn, lowers your tax liability. If you put in the maximum amount of $2,550 in your FSA for the year, you may have some leftover cash to spend elsewhere before it is forfeited to your employer.
Fortunately, these funds can be used on almost anything health related. Here are some great uses for your remainder savings:
Even though many of us need eyeglasses to see clearly, the style of those eyeglasses can become outdated over time. With trends constantly changing, it might be time to change up your glasses style. Logan Eye care offers a variety of styles and our staff is happy to help you find a new frame that best suits you.
Your FSA funds can also be used for prescription sunglasses. It is a great benefit that will help protect your eyes from exposure to the sun.
It is easy to overlook an annual eye exam when your eyes feel healthy. However, eye exams play an important factor in catching early signs of serious eye problems such as glaucoma, cataracts and detached retina. If you, a spouse or a dependent is overdue for an eye exam, your remainder funds can help avoid future risk for you or your loved ones.
If you have considered getting contact lenses, now might be the time, and your FSA savings may help fund the purchase. Contact lenses have a natural feel as they move with the eyes and correct vision problems, such as near sightedness, far sightedness, and astigmatism. They are convenient for sports and outdoor activities and can allow you to feel confident about your physical appearance overall.
If you feel additional spending is not a good use of your benefits, then consider making a claim for a past medical expense that was not covered during the year. For example, an FSA claim could cover travel costs for medical care or even an annual exam that was not accounted for. Additionally, flexible spending accounts can also be used to cover medical costs for spouses and qualifying dependents.
Health Savings Account
Fortunately, rushing to use your benefits before the end of the year does not always have to be the case. A health savings account, also known as HSA, is a pre-tax personal savings account for medical expenses that rolls over to the next calendar year. That means your savings will not surrender to your employer, unlike a flexible spending account. And because an HSA rolls over, it allows more room for savings than an FSA.
HSAs also make a great investment tool. Since an HSA rolls over to the next calendar year, it gives an opportunity to grow your savings without being penalized. Also, some companies contribute to your investment through stocks and mutual funds. And even though HSAs are built to cover medical costs, it has become common to invest in them as a 401k replacement. If that is your plan, look for an HSA that is low cost yet high performing.
You are only qualified for a health savings account if you are enrolled in a high-deductible health insurance plan. This means that you have a minimum deductible of $1,300 and an out-of-pocket maximum of $6,550. Once you are eligible for Medicare at the age of 65, you can no longer contribute to your HSA.
When it comes down to it, both HSAs and FSAs help minimize out-of-pocket health expenses. Understanding what each account has to offer is a good start to using your benefits toward eye care before they expire at the end of the year.