What are some tips for using my FSA and HSA effectively?

What are some tips for using my FSA and HSA effectively?

To maximize your FSA and HSA, consider these tips: 1) Use your FSA funds before they expire, 2) Keep receipts for eligible expenses, 3) Contribute the maximum allowed to your HSA for tax benefits.

Can you explain the difference between FSA and HSA?

Sure! An FSA (Flexible Spending Account) is employer-established and has a use-it-or-lose-it policy, while an HSA (Health Savings Account) is owned by you and can roll over funds year to year.

What expenses can I use my FSA and HSA for?

You can use both for qualified medical expenses like prescriptions, doctor visits, and certain over-the-counter items. HSAs also cover some long-term care and health insurance premiums.

How can I track my expenses for these accounts?

You can track expenses by keeping receipts and using budgeting apps that categorize health expenses. Some HSAs also provide tools for tracking.

Are there any penalties for not using my FSA funds?

Yes, if you don't use your FSA funds by the end of the plan year, you typically lose them unless your employer offers a grace period or carryover option.