A End of Year Reminder Shared From:
Simon Orthodontics
If you have funds set aside in a flexible spending account (FSA) or healthcare saving account (HSA), now is the time to pay off an existing balance or begin new treatment for you or a child so you don’t lose any of that money. Generally, these plans do not let you rollover unused dollars to the next benefit year.
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Don’t Lose Your Money in an FSA or HSA
Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) can save you money. However, many people lose these funds each year because they don’t understand the rules. With a little planning, you can avoid that mistake.
What Is the Difference Between an FSA and an HSA?
An FSA allows you to set aside pre-tax money for medical expenses. However, most FSAs follow a “use it or lose it” rule. If you don’t spend the money by the deadline, you may lose it.
An HSA, on the other hand, is more flexible. The money rolls over every year and stays with you, even if you change jobs. Because of this, HSAs work well for long-term savings.
Why People Lose Their FSA Money
Many people overestimate their medical costs. Others forget the deadline or wait too long to spend the funds. As a result, unused money goes back to the employer.
Additionally, some people don’t know what expenses qualify. This confusion often leads to missed opportunities to use the money properly.
Smart Ways to Use Your FSA Funds
To avoid losing money, start by reviewing your balance early in the year. Then, plan your expenses ahead of time.
You can use FSA money for:
Doctor visits and copays
Prescription medications
Vision care, including glasses and contacts
Dental work
Over-the-counter medical items
Moreover, check if your plan offers a grace period or a small rollover option.
How to Make the Most of Your HSA
HSAs offer even more benefits. Because the money rolls over, you can save it for future medical needs. In fact, many people use HSAs as a backup retirement fund.
To get the most value:
Contribute regularly
Pay current medical bills out of pocket if possible
Let your HSA balance grow over time
Plan Ahead and Protect Your Money
The key to keeping your FSA or HSA money is planning. Review your account often. Know your deadlines. Most importantly, understand what expenses qualify.
By staying informed and organized, you can keep more of your hard-earned money and reduce your healthcare costs.
