HSA & FSA Spending Guide

Maximize health savings accounts and avoid losing FSA funds before year-end deadline

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FSA vs HSA: Know the Difference

FSA (Flexible Spending Account)

Use it or lose it: Must spend by year-end (or grace period)

Employer owned: Lose funds if you leave job

2024 limit: $3,200 per person

Requires: Any health plan or no health plan

Tax benefit: Pre-tax contributions

HSA (Health Savings Account)

Rollover: Funds never expire, roll over annually

You own it: Keep forever, even if change jobs

2024 limit: $4,150 individual / $8,300 family

Requires: High-deductible health plan (HDHP)

Tax benefit: Triple tax advantage

FSA Year-End Deadline Approaching!

Most FSAs operate on "use it or lose it" rules. Check your plan's specific deadline:

  • Standard FSA: December 31 deadline
  • Grace period: Some allow until March 15 of next year
  • Carryover option: Some allow up to $640 to roll over to next year
  • Action required: Spend or lose unused funds!

FSA Year-End Spending Strategies

Check Your Balance Now

  1. Log into your FSA account or call administrator
  2. Check available balance and deadline
  3. Review any pending reimbursements
  4. Calculate how much to spend by year-end

Quick Wins: Use Funds Fast

  • Doctor/dentist appointments: Schedule before year-end
  • Eye exam and glasses: Get new prescription eyewear
  • Stock up on eligible items: Buy year's supply of approved products
  • Prescriptions: Fill 90-day supplies
  • Outstanding copays: Pay pending medical bills

Complete List of FSA/HSA Eligible Expenses

Medical Care

  • Doctor visits and copays
  • Specialist visits
  • Hospital services and surgery
  • Lab work and diagnostic tests
  • X-rays and imaging
  • Physical therapy
  • Chiropractor services
  • Acupuncture
  • Mental health counseling
  • Fertility treatments

Dental Care

  • Dental exams and cleanings
  • Fillings and crowns
  • Root canals
  • Orthodontics (braces, Invisalign)
  • Dentures
  • Dental X-rays
  • Teeth whitening (if medically necessary)

Vision Care

  • Eye exams
  • Prescription eyeglasses
  • Contact lenses and solution
  • Prescription sunglasses
  • LASIK and vision correction surgery
  • Reading glasses (prescription)

Prescriptions & Medications

  • Prescription drugs
  • Insulin
  • Over-the-counter medications (with prescription or for specific conditions)
  • Birth control

Over-the-Counter Items (No Prescription Needed)

Stock Up on These

  • Pain relievers (Tylenol, Advil, Aleve)
  • Allergy medications (Claritin, Zyrtec, Benadryl)
  • Cold and flu medicine
  • Cough drops and throat lozenges
  • Antacids (Tums, Pepto-Bismol)
  • First aid supplies (bandages, gauze, tape)
  • Thermometers
  • Blood pressure monitors
  • Pregnancy tests
  • COVID-19 tests
  • Feminine hygiene products (pads, tampons)
  • Sunscreen (SPF 15+)
  • Hand sanitizer

Medical Equipment & Supplies

  • Crutches and wheelchairs
  • Blood glucose monitors
  • Blood pressure monitors
  • Heating pads
  • Ice packs
  • Compression socks
  • Knee braces and supports
  • TENS units
  • Air purifiers (for medical conditions)
  • Humidifiers (for medical conditions)

Personal Care (Medical Necessity)

  • Diabetic supplies
  • Incontinence supplies
  • Ostomy supplies
  • Breast pumps and supplies
  • Baby monitors (medical grade)

Where to Spend FSA Funds

Physical Stores

  • CVS: Large FSA-eligible section
  • Walgreens: Extensive FSA products
  • Walmart: Pharmacy and health section
  • Target: Health and wellness aisles
  • Costco/Sam's Club: Bulk purchase options

Online FSA Stores

  • FSAstore.com: Only FSA-eligible items
  • HSAstore.com: Dedicated HSA/FSA shopping
  • Amazon: Filter by "FSA Eligible"
  • Walgreens.com: FSA filter available
  • CVS.com: Easy FSA shopping section

HSA: The Ultimate Tax-Advantaged Account

Triple Tax Advantage

HSAs Offer Unique Benefits

  1. Tax-deductible contributions: Reduce taxable income
  2. Tax-free growth: Investments grow without taxes
  3. Tax-free withdrawals: For qualified medical expenses

No other account offers all three benefits!

HSA as Retirement Account

Advanced strategy: Use HSA as a "super IRA"

  • Pay medical expenses out of pocket now
  • Let HSA investments grow tax-free
  • Save receipts for future reimbursement (no time limit!)
  • After age 65: Withdraw for any reason (like traditional IRA)
  • Still tax-free for medical expenses at any age

HSA Contribution Strategies

Maximize 2024 Contributions Before Year-End

  • Individual: $4,150 maximum
  • Family: $8,300 maximum
  • Age 55+ catch-up: Additional $1,000
  • Deadline: Can contribute until tax deadline (April 15, 2025) for 2024

HSA Investment Options

Don't just save—invest your HSA for growth:

  • Most HSAs offer investment options after minimum balance ($1,000-$2,000)
  • Invest in mutual funds, ETFs, or stocks
  • Let funds grow tax-free for decades
  • Best for long-term healthcare costs

Year-End HSA & FSA Checklist

FSA Action Items

  • ☐ Check FSA balance and deadline
  • ☐ Review plan's grace period or rollover rules
  • ☐ Schedule any needed medical appointments
  • ☐ Get eye exam and new glasses/contacts
  • ☐ Visit dentist for cleaning or needed work
  • ☐ Fill prescriptions (90-day supply)
  • ☐ Stock up on OTC medications and supplies
  • ☐ Purchase eligible medical equipment
  • ☐ Submit pending reimbursement claims
  • ☐ Save receipts for all FSA purchases
  • ☐ Verify purchases are eligible before buying

HSA Action Items

  • ☐ Maximize 2024 contributions before year-end (or April 15, 2025)
  • ☐ Verify you have qualifying HDHP coverage
  • ☐ Review HSA investment options
  • ☐ Consider investing excess cash balance
  • ☐ Keep receipts for potential future reimbursement
  • ☐ Review beneficiary designations
  • ☐ Evaluate contribution strategy for next year
  • ☐ Don't withdraw unless necessary (let it grow!)
  • ☐ Save medical receipts indefinitely

Common FSA/HSA Mistakes to Avoid

Don't Make These Errors

  • Forgetting FSA deadline: Losing hundreds or thousands of dollars
  • Not saving receipts: Can't get reimbursed without documentation
  • Buying ineligible items: Purchases denied, no reimbursement
  • Over-contributing to HSA: 6% penalty on excess contributions
  • Using HSA for non-medical: Taxes + 20% penalty if under 65
  • Contributing to HSA without HDHP: Not eligible, must have qualifying plan
  • Not investing HSA funds: Missing growth opportunity

Special Situations

Dependent Care FSA

Separate from health FSA—for childcare expenses:

  • 2024 limit: $5,000 per family
  • Eligible: Daycare, preschool, summer camp, after-school care
  • Age limit: Children under 13
  • Also "use it or lose it" by year-end

Limited Purpose FSA

Can have with HSA—but only for dental and vision:

  • Allows HSA + FSA combination
  • Only covers dental and vision expenses
  • Separate from regular FSA
  • Subject to same use-it-or-lose-it rules

Changing Jobs

  • FSA: Use funds before leaving or during grace period
  • HSA: Keep it forever, take it with you
  • COBRA: May extend FSA access (but expensive)

Don't Leave Money on the Table

FSA funds are your money—don't let them disappear at year-end. Check your balance now, schedule appointments, and stock up on eligible items. For HSAs, maximize contributions to take advantage of the triple tax benefit and long-term growth potential. These accounts are powerful tools for healthcare savings—use them wisely!