What Are HSA and FSA Savings Accounts?
Many employers have begun offering FSA or HSA options to their employees, which can provide additional savings on dental care. Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA) are pre-tax accounts that can be used for medical expenses–eyeglasses, medical co-pays, dental services, etc. This post explores what they are, and how they can help with health care costs.
An HSA can be be acquired either through your employer, if it’s offered, or through a bank. You can open an HSA as long as your medical insurance falls in the category of a high deductible insurance, or $1,300 for self-coverage and $2,600 for family coverage (as of 2017). HSA’s are like savings accounts, but the money you put in to them is taken out of your paycheck before taxes. You can contribute up to $3,400 for yourself or $6,750 for your family in any year. Money that is not used remains there, and may even rack up some interest (depending on the account).
An FSA is offered only through your employer, and is not tied to high deductible regulations. You can contribute up to $2,600 into an FSA account in a year, but any money that you do not use in the year, you lose–with two exceptions. Your employer can opt to provide you with up to 2.5 months of grace period in the following year, or can allow up to $500 to rollover into the next year.
If you are someone without dental insurance, putting money into an HSA or FSA for dental services can be a smart idea. Even if you have dental insurance, it can be wise because once you reach your annual max, you will be paying out of pocket. Having a pre-tax savings account can be helpful. Lastly, you can use an HSA or FSA account to pay for discounted services, receiving additional savings.
A Few Last Words
The only thing to keep in mind with the HSA or FSA is that typically you should be paying for services that have already been completed. So if you’re trying to take advantage of a discount plan that will span the whole year or cover several procedures, you may run into difficulty with using the HSA or FSA. One suggestion that we liked: use a rewards credit card to pre-pay for a discounted service like Totalcare, then once the service is done, send in the receipts for reimbursement through your HSA or FSA account. That way, you get the points on your credit card, the discounted service AND the pre-tax reimbursement.
If HSA or FSA’s are right for you and your family depends on what kind of health insurance you have, if you have dental insurance already, and what you tend to spend on medical bills throughout the year. The best thing is to speak with your healthcare providers, such as your primary care physician and your dentist, who know your medical and dental history and can help you decide what is best.