I have to admit … I was seized with a panic yesterday because I thought, "Omigosh, it's already December and I haven't checked my Flexible Spending Account dollars!"
And then I remembered … "Self. THIS year you have a Health Savings Account. It can roll over."
With high deductible plans, companies are offering two different directions – one is a Flexible Spending Accounts and the other is a Health Savings Account.
I will not say who has left money at the end of a year in a Flexible Spending Account (FSA) before.
And the reason I won't confess is because an FSA is a "use-it or lose-it" kind of deal. If you don't use all the money in your FSA by the end of the calendar year, you lose it.
So if you have an FSA, this is definitely the time to be checking your balance and turning in your claims for reimbursement or paying those last minute eligible bills (usually only for prescription meds and bills for health care services.)
An HSA is like a savings account, except you can only use it to pay for prescription medications and healthcare services.
But you don't lose it at the end of the year. As long as you're covered by an eligible high deductible plan, you can roll it over. It's also paid for (often times) with pre-tax dollars, so it can lower your taxable income. But like a savings or checking account, if you don't have the money in there, you can't spend it.
So now's the time! Do you have a Health Savings Account? A Flexible Spending Account? Make sure you know whether yours is a use-it-or-lose-it … or whether your health care plan is eligible to continue using the savings plan you've got.
And if all this is Greek to you, then check out 101 video!