Navigating FSA and HSA accounts can be confusing, as well as what is an approved expense. At Tao to Wellness, we are an approved expense for both of these. Below is a quick guide to how these accounts differ.
FSA
For starters, both these accounts are pre tax so they help you reduce your taxable income by putting money away for healthcare expenses. A FSA is a Flexible Spending Account that your employer owns. Employees decide how much they would like to contribute, up to a limit per the IRS. If the funds are not used within the calendar year, December 31st of each year, that money put aside goes back to the employer, this is what they call a “Use it or Lose it” account. If you don’t spend it, you lose it. It’s like leaving money on the table, we recommend not doing that! Also, for a few plans, there is a grace period all the way to March, but this is rare.
HSA
A HSA is a health savings account that you own. Usually it requires an eligible health insurance plan and contributions are limited to whatever the IRS decides for that year, for example in 2022, the maximum was $3650 for self and $7750 for family coverage. HSAs are not “Use it or Lose it”, they rollover year after year and if you were to leave your employer, the HSA stays with you, unlike the FSA which does not.
How do HSAs and FSAs work?
Almost all accounts have a ‘credit card’. Most times it’s as easy as swiping, other times accounts require proof of eligibility, which means a detailed receipt with our information, including tax ID numbers and NPI numbers to ensure we are a legitimate expense. In that case, patients pay for services in full, we furnish what’s called a Superbill for them and they get reimbursed directly from their FSA.
What is Considered an Expense for my FSA and/or HSA?
Usually anything health or medical related; copays, prescriptions, acupuncture, chiropractic, physical therapy, almost anything. That being said, depending on the account/plan; massage is sometimes even considered as eligible, so inquire!
If you are having a hard time spending all your FSA funds, check out this list at the FSA Store, you will be shocked at what is now considered an approved expense thanks to the CARES act (Coronavirus Aid Relief and Economic Security Act), things have certainly changed! Now things like animal expenses, sunscreen, Neosporin, menstrual products and even Advil is approved. Tons of over the counter items are now included.
At Tao to Wellness, everything we offer is an approved expense, but if you have any questions feel free to reach out.
