Fsa eligible expenses6/18/2023 ![]() If you leave your job, you forfeit all funds in the account upon your departure. FSAs, however, are owned by your company, though you may contribute your own money to them. You can even use HSA funds to cover COBRA costs and health insurance premiums if you need to when you're unemployed. Your HSA belongs to you, not your employerĮven if you opened it through your company, your HSA (and everything inside of it) is yours forever-even if you leave your job. To find out more, check out our guide to HSA contribution limits. If your employer contributes to your HSA or FSA on your behalf, this may impact how much you can contribute. For FSAs in 2022, the maximum contribution is $2,850 and rises for 2023 to $3,050. Those 55 and older can contribute an additional $1,000 as a catch-up contribution. In 2023, this rises to $3,850 for individual coverage and $7,750 for family coverage. Employers can also determine FSA limits for their plans.įor HSAs in 2022, the most you can contribute is $3,650 for individual coverage and $7,300 for family coverage. You may be able to contribute more to an HSA than an FSAīoth HSAs and FSAs have maximum annual amounts you can contribute, which the IRS determines each year. Note: This does not impact the ability to have a dependent care FSA. This type of FSA covers only those expenses not covered by your health plan, such as dental and vision care. You can have an HSA along with a limited purpose FSA, also known as an LPFSA. If you're contributing to an HSA, you can't fund just any type of FSA in the same year. FSAs, on the other hand, are employee benefits that anyone can contribute to as long as they are eligible and their employer offers them. Ask your benefits provider if you aren't sure which kind you have. To be eligible for an HSA, you must be enrolled in an HSA-eligible health plan and not have other disqualifying health coverage. Whether you can open an FSA depends on your employer HSAs are determined by your health insurance It's your account, so it's your decision. ![]() Some people invest all of the funds they hold others prefer to save some-or all of their-cash for current expenses. You can decide how much or little you want to invest in your HSA. As of 2022, an average retired couple age 65 may need approximately $315,000 saved (after-tax) to cover health care expenses throughout their retirement, according to the Fidelity Retiree Health Care Cost Estimate. Combined with the ability to carry over funds from year to year, you may be able to build up a nest egg to pay for qualified medical expenses. This lets you position your funds to benefit from compound interest. Unlike with an FSA, you can potentially grow any money you have in your HSA by investing it. Check with yours to see if you can carry over a portion of your FSA at year end. Some employers may allow you to carry forward a small amount of your unused balanced or can offer a grace period (normally up to 2.5 months). But it's especially helpful in building savings to pay for large, future medical expenses, like those you anticipate having in retirement.įSAs, meanwhile, are generally "use it or lose it." This means that when the new benefit year begins, you may forfeit whatever funds remain in the account from the prior year. This can make things easier if you happen to contribute more than you're able to spend in a year-you won't have to rush to buy Band-Aids, or glasses before your money expires. HSAs allow you to carry money forward indefinitely, so your funds are there for you year after year. Outside of the similarities, FSAs and HSAs differ in a few important ways:
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