FSAs & HSAs: Planning for Savings

December is already upon us. The sun is setting earlier, and snow flurries have been spotted! As we excitedly plan for the new year, don’t forget to check on your health spending and make sure you’re taking full advantage of your tax-free “Health Savings Accounts” (HSAs) and “Flexible Spending Accounts” (FSAs).

First and foremost, if you have cash in an FSA account, start making appointments with your healthcare providers right away. FSAs are a great tool for managing regular healthcare expenses, but anything left in the FSA at the end of the year is at risk of disappearing for good. Keep in mind that others are in the same boat, so sometimes it can be hard to get in that last minute appointment. Great options for spending last minute funds are a new pair of prescription glasses or starting Invisalign treatment!

If you have money in an HSA, time is on your side; that money will be yours forever. HSAs are only included in certain types of medical insurance plans known as high-deductible plans, and you’ll only be able to contribute to an HSA while enrolled in that type of plan. If you have access to an HSA, it’s always a great idea to save into it while you can. You can always use the funds on future healthcare expenses.

Tax-free health accounts are a great way to make every dollar go further. $100 before tax quickly becomes only $90, $80, or $70 after both state and federal taxes. Many FSAs and HSAs require you to decide on your contribution amounts for 2022 in December of 2021. If you know a large healthcare expense is coming in the next year, including dental care such as orthodontic treatment, plan ahead so you don’t miss your chance to save!