HSA and FSA: What Are They and How Are They Different?

Nov 6 2019

HSAs and FSAs are two ways to finance a variety of health care expenses, including the cost of certain eye care services and procedures. But if you’re like most people, you may not fully understand the benefits of either or differences between the two, which may lead to you leaving precious dollars on the table at the end of the year.

At Central Oregon Eyecare, we want to help make understanding these accounts easier. Below, you can find out the important differences between HSAs and FSAs, and how to get the most out of these accounts, no matter which one you have.

HSA and FSA

What’s an HSA?

HSAs, or Health Savings Accounts, are available to those who have a high-deductible health plan. The main benefit of an HSA is that any money stored in one is tax-free. This allows you to build up savings for your medical expenses, and simultaneously reduce your taxable income.

You decide how much to fund your HSA each year, with the option to adjust this funding at any time. You’ll be given checks and/or a debit card tied to the account that you use to pay your medical bills.

One key feature of HSAs is that any money left in your HSA at the end of a year rolls over into the next year; you don’t lose any of your HSA funds over time. This is different from how an FSA works.

What’s an FSA?

FSAs — Flexible Spending Accounts — have less stringent requirements. While you can’t get an FSA outside of your employer benefits like you can with an HSA, an FSA doesn’t require a high-deductible health plan. As with HSAs, FSAs give you a tax-free payment option for medical expenses.

FSA funds — since the account is set by your employer — sometimes offer a matching bonus. At the beginning of the year, you set a specific amount to put in your FSA, and your employer may match a portion of that amount.

FSAs have more limitations than HSAs. They often can’t hold as much money. They’re tied to your work, so leaving or changing jobs usually means losing those funds, or even owing money back to your FSA administrator. You can only decide how much to fund an FSA during open enrollment, and perhaps most importantly, most FSA accounts won’t roll over funds after a year.

This last part is particularly important to remember, and is the reason why you’re often reminded to use it or lose it in reference to spending your FSA funds on medical expenses before the year is over.

What Can I Spend My HSA or FSA On at Central Oregon Eyecare?

For many people, health insurance is considered separate from their vision insurance, which means they can’t use their benefits on eye care. An HSA or FSA, meanwhile, gives you a tax-free way to pay for eye care services, even when insurance doesn’t. That’s why many of our customers at Central Oregon Eyecare prefer to pay for their eye care with these accounts.

The following services and products can be paid for using HSAs and FSAs at Central Oregon:

Eyewear

Central Oregon Eyewear accepts HSA and FSA payment for select eyewear, including:

  • Eyeglasses
  • Contact lenses
  • Prescription sunglasses

HSAs and FSAs are great options for buying new eyewear. This is especially true if you’re approaching the end of an FSA year and have leftover funds, and want to treat yourself to a fresh pair of stylish frames and lenses.

Eye Exams

Eye exams are required for you to get new lenses or contacts and prescriptions from Central Oregon expire after 12 months, meaning that glasses and contact lens wearers need annual eye exams. Your prescription will likely change over the course of a few years, and eye exams are an important way to prevent and detect serious eye issues, so we recommend having an eye exam on an annual basis.

Whether you’re looking for a checkup or need an eye exam for new eyewear, an HSA or FSA is a good way to cover your visit.

Understanding Your Options

While we’ve tried to give you a working understanding of how to apply your HSA or FSA, we can’t tell you everything about your specific situation. The IRS modifies its eligible expenses and/or HSA and FSA requirement every year, and your workplace may have its own policies regarding these accounts. And paying for non-qualified expenses with an HSA or FSA will usually incur fines exceeding normal taxes.

Always double-check that you can apply an HSA or FSA to a specific medical bill. (You can find covered medical services on the IRS website.)

Questions? Central Oregon Eyecare Has Answers

As we said from the start, using HSAs and FSAs optimally isn’t always easy. This is why at Central Oregon Eyecare, we’re here to answer any questions you may have concerning the services we offer and specifically, paying for those services.

In addition to accepting HSAs and FSAs, we also accept many insurances, Medicare, and managed care networks.

At Central Oregon, our top priorities are your experience with us, and your understanding of your eyes and vision care. We’re happy to discuss your vision needs, no matter what your questions are. Contact us through our website, give us a call, or visit one of our locations for more information and assistance.

 
 

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