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2021 is Coming to and End: How to Use Your HSA & FSA Benefits

Healthcare can be confusing and expensive. Even the things that are designed to help save us money can be overwhelming and unclear. Understanding and maximizing utilization of Health Savings Accounts (HSA) and Flex Spending Accounts (FSA) can greatly reduce healthcare costs and help you afford the care you want and need. Both HSA and FSA accounts have some similarities (like saving money) but are quite different in many ways. Both accounts allow for tax-free money to be used to pay for medical costs like co-pays, coinsurances, deductibles, prescription and over the counter medication, mensuration supplies, durable medical equipment, and other select healthcare costs. Who is eligible to open HASs and FSAs vary based on the individuals healthcare plan and employer benefit packages. Keep reading to learn what type of account works best for you.

What is a Health Savings Account (HSA)?

The key to qualifying for an HSA depends on the type of insurance plan you have. You must have a high deductible healthcare plan as defined by greater than a $1,400 deductible for an individual or $2,800 deductible for a family. An HSA saves you money because the money that is contributed is counted as pre-taxed dollars. Contributing to an HSA now can also saves you money in the future because HSA money gains interest in a savings account or it can be invested and gain value. The money gained via interest or investment is also tax-free when it is used for eligible healthcare expenses.

Tips for using an HSA:

  • Ensure you have an eligible insurance plan. If you purchase your insurance through the Marketplace, you can search specifically for HAS eligible plans. Click here for Colorado Marketplace information.

  • A HSA can be set up through a trustee; this could be directly through your insurance company or through a bank.

  • The maximum contribution amount per year is $3,550 for an individual or $7,100 for a family. Some employers contribute to an employees HSA account as part of their benefits and pay package.

  • Contributions to the HSA can occur at any time throughout the year.

  • HSA funds can gain interest and/or be invested tax-free as long as you use the funds to pay for qualifying medical expenses. This can be very beneficial as healthcare costs continue to rise.

  • HSA funds can be withdrawn and used for non-qualified expenses but it will be subject to income tax and a 20% penalty.

  • HSA money does not expire and follows you as you change jobs, move, or retire.

What is a Flex Spending Account (FSA)?

Similar to HSAs, FSAs can reduce your healthcare costs because contributions are made with pre-tax dollars. Common healthcare costs a FSA money can be used for include co-pays, deductibles, coinsurances, prescription and over the counter medication, medical products, etc. Pharmacies like Walgreens and CVS make online shopping easy by designating eligible products with an "FSA" logo.

How to use a FSA?

  • FSAs are set-up and managed by an employer; self-employed individuals are not eligible for an FSA.

  • Contribution amount for the year must be determined at the beginning of the year.

  • The maximum yearly contribution amount is $2,750.

  • FSA funds are "use it or lose it"; if you do not use your FSA funds by the end of the year the remaining amount is forfeited. Some plans allow you to roll-over the amount for 1 additional calendar year.

Many HSA and FSA administrators supply the eligible individual with a debit card that can be used just like a credit card. Be sure to save all your receipts as many administrators will require you to submit proof that the expenses are eligible.

Learn more about HAS and FSA on the IRS website:

Physio, Yoga & Wellness is a health and wellness provider and accepts HSA and FSA as form of payment. Superbills are provided with all pertinent information to ensure coverage.

Health and wellness can be expensive. But investing in your health can lead to a happier and more fulfilling life.

Schedule an appointment for Physical Therapy, Trigger Point Dry Needling, Health Coaching, Exercise/Personal Training and Private Yoga here:



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