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If you have an FSA or HSA but aren’t clear on all the details of what you can use those funds for, you’re not alone. The following are a few frequently asked questions about FSAs and HSAs designed to help you take full advantage of the money you’ve put in.
What are Flexible Spending and Health Savings Accounts?
FSAs and HSAs are both special repositories for funds designated to cover certain medical expenses. The contributions you make to them are pre-tax, and any withdrawals for qualifying expenses are also tax-free. Both also have annual contribution limits, with FSAs maxing out at $2,600 per employer for 2017, and HSAs capped at $3,400 for an individual and $6,750 for a family.
There are other significant differences between FSAs and HSAs, and these include what happens to the left-over funds at the end of the year. If you have an HSA, you can roll over the remaining balance in your account, and this will not count towards your annual contributions for the new year. FSA balances do not roll over, and with limited exceptions, the unused funds will be lost.
How Does FSA Work?
When you sign up for an FSA through your employer, you decide how much to contribute up to the annual maximum, and that amount will automatically be deducted from your pre-tax income. While your contributions will be made periodically throughout the year, the entire annual amount you set is available to you at the beginning of each year.
In order to use the funds in your FSA, you’ll need to provide written proof from your provider detailing the dollar amount and stipulating that you have no other applicable insurance coverage for the product or service in question. At the end of each year, you will lose all unused funds in your FSA, although your employer may choose to allow you a grace period of 2 ½ months, or they may let you roll over up to $500 of your remaining balance to the next year.
What Can I Purchase With My FSA or HSA?
You can use your FSA or HSA to cover deductibles, co-pays, and other out-of-pocket medical expenses. It’s important to note that vision services, including an eye exam and prescription eyewear, are eligible for payment through FSA and HSA funds even if you don’t have vision coverage as part of your insurance plan.
Can I Buy Contact Lenses With My FSA/HSA?
Yes. Prescription contact lenses can be paid for with funds from your FSA or HAS.
When Do FSA Funds Expire?
FSA funds expire at the end of the calendar year, with some exceptions. These include the addition of an optional 2 ½ month grace period provided by your employer, and the ability to roll over up to $500 of your remaining balance to the next year. These options may or may not be available to you depending on the details of your plan.
When Should I Place My Order?
As soon as possible. In order to get the most out of your FSA or HSA, schedule an appointment for your annual eye exam or other needed service with your Tulsa optometrist today by calling our offices at (918) 376-7972.