Flexible Spending Account (FSA)
Year-end 2023 is approaching and 2024 is just around the corner. FSA participants in 2023 could contribute up to an annual maximum of $3,050 for an HCFSA or LEX HCFSA. This account is used to reimburse participants for dependent care expenses, such as child daycare, elder care, etc. For 2024, thе FSA contribution limits arе as follows: Hеalth Carе FSA: $3,200. Dеpеndеnt Carе FSA: $5,000. An FSA is a savings account that you pay into throughout the year via payroll deductions. It is a medical spending account offered by your employer.
It is important to note that the main downside to an FSA is the use-it-or-lose-it rule. Any leftover balance generally reverts back to the employer. Thar is If the employee fails to incur enough qualified expenses to drain his or her FSA each year, It is now the time to start planning to leverage your 2023 Flexible Spending Account (FSA) and Health Savings Account (HSA) dollars. The carryover amount for health care and limited-purpose FSAs is increasing. For the year 2023, you can carry over up to $610 in unused funds for plan year 2024.
FSA and HSA accounts both allow for contributions with pre-tax dollars. However, an FSA is not the same as an HSA for tax purposes. HSA contribution limits are different from the FSA limits and they allow for catch-up contributions for those 55 and older, FSAs do not. Both HSAs and FSAs allow participants to save for qualified medical expenses. HSAs usually allow for higher contribution limits and allow you to carry funds forward. However, you’re only eligible if you enroll in an HSA-eligible health plan.
2023 FSA Eye Eligible Items
- Eye Glasses
- Eye Drops (OTC)
- Eye Equipment (prescription glasses and sunglasses and prescription contact lenses. Items associated with the maintenance and care are also considered eligible reimbursable expenses under consumer-directed healthcare accounts.
- Eye Exam
- Eye Mask for Pain Relief
- Eye Pressure Monitor
- Eye Surgery
- Eye Treatment Medication (Source FSA: Eye treatment medications are eligible for reimbursement with a prescription with a flexible spending account (FSA), health savings account (HSA), a health reimbursement arrangement (HRA), or a limited-purpose flexible spending account (LPFSA). Eye treatment medication reimbursement is not eligible with a dependent care flexible spending account (DCFSA). If this is an over-the-counter (OTC) eye treatment medication, it would be fully eligible with an FSA, HSA, HRA, or LPFSA.
- Eye Glass Accessories (Eye Glass Screw Driver, Pre-Moistened Lens Wipes, Keychain Reading Glasses, Eye & Ear Glass Droppers, Reading Glasses On Your Phone, Lens Cleaning Spray, Lens Wipes, Anti-Reflective Leans Cleansing Spray, Repair Kit, Nose Pads, Sunglass Reader With Magnetic Detachable Polarized Lens, Sunglass Reader With Smoke Tint,
Flexible Spending Account 2023 And Eligible Items.
The year 2023 FSA dollars are for eligible expenses and care provided from the effective date of enrollment through March 15, 2024. If you have a health plan through your job, you can use an FSA to pay for healthcare costs such as (Source: Metlife, It is important that you check with your employer):
- Health insurance copayments, office visits, co-insurance payments, and deductibles
- Dental work and orthodontia
- Therapy and counseling services
- Chiropractic care and acupuncture
- Hospital fees, surgery, and diagnostic services
- Allergy testing
- Home healthcare: Thermometers, pain relief devices, blood pressure monitors, medical alert devices, blood sugar test kits, and more
- Over-the-counter (OTC) medications: Cough, cold, flu, allergy, asthma, pain relief, and more
- Baby and child supplies: Breast pumps, bed mats, bedwetting underwear, baby monitors, and more
- Skincare: Sunscreen, acne products, medicated lip balms, and more
- Oral care: Pain relief, water flossers, denture cleanser tablets, and more
- Foot care: Orthotics, foot creams, callus and corn removers, blister treatment, and more
- Digestive health: Heartburn relief, antacid tablets, laxatives, acid reflux pillows, and more
- Vitamins: Prenatal, nutritional supplements, multivitamins, and more
- First aid supplies: Bandages, pain relief creams, antibiotic ointments, first aid kits, and more
- Sexual health medications and products: OTC and prescription birth control, condoms, ED medications, fertility tests, and more
- Menstrual products: Pads, tampons, menstrual underwear, menstrual pain relief, and more
- Incontinence supplies: Pads, underwear, bed underpads, and more
- Smoking cessation: Programs, products, and more
Key takeaways about FSAs, HSAs and HRAs (Source: Aetna)
- FSAs and HSAs both offer tax benefits and have annual contribution limits.
- You must have an HDHP to qualify for an HSA.
- Funds in an HSA roll over from year to year. There is no “use it or lose it” rule.
- Many HSAs offer investment options.
- FSAs are “use it or lose it.” That means you’ll lose any funds you don’t spend by the end of your plan year unless the plan has a grace period or carryover feature.
- You can use your FSA to cover eligible healthcare costs at the start of the year. The entire amount is available on day one.
- HSA holders cannot spend more than the funds deposited in their HSA. But they can save receipts for qualified medical expenses and file for reimbursement later after their balance has grown.
- You can’t contribute to an HSA and a traditional FSA in the same year. But HSA holders can also use an LPFSA for dental and vision expenses, and a Dependent Care FSA for childcare costs.
- You can contribute funds to an HSA and FSA. Only your employer can contribute to your HRA.
- Anyone can contribute to your HSA: you, your employer, or another person.
- With HRAs, employers may limit which health expenses are eligible and the amount you’re able to roll over from year to year.
The 2023 FSA period is January 1, 2023, through December 31, 2023. You are allowed to carry over into 2023 and must use the remaining funds by March 15, 2024. It is important to note that the 2022 FSA funds can only be used to reimburse eligible expenses for care provided from the effective date of your enrollment through March 15, 2023.
Make sure you take advantage of the benefits that your FSA account allows. Contact us if you have questions about your FSA account and eligible items eye-related items. We are here for you.