Previous | How do I open my first account? Next | Tips for using peer-to-peer payment apps
September 11, 2023 / Levi Crouse
The basics of health saving accounts

The basics of health saving accounts

Minimizing out-of-pocket medical expenses is tough when you have a high-deductible health plan, but a health savings account can help. With a health savings account (HSA), pre-tax money is deducted from your paycheck and pooled for medical expenses. You can use the money for qualified medical expenses, like deductibles, copayments, dental or vision costs, and prescriptions, lowering your overall health care costs.

Your employer may offer other options like a flexible spending account, or FSA. Though their acronyms are similar, there are major differences between an HSA and FSA.

For example:Graphic of a woman in a skirt suit with a briefcase standing on a stack of coins, placing a coin into a jar labeled "Health".

·         Funds in an HSA can be rolled over from year to year, unlike FSA money, which is “use it or lose it.” If you leave a job, you can take an HSA account with you, while funds in an FSA are forfeited.

·         If your employer’s health plan doesn’t offer an HSA, you can set one up on your own through a bank or other financial institution. An FSA can only be set up through your employer.

You can contribute to an HSA if you have a high-deductible health plan. According to healthcare.gov, a plan is considered high deductible if the deductible is $1,500 or more for an individual or $3,000 or more for a family.  

There is a limit to the amount of money you can contribute to an HSA, and it generally increases every year. In 2023, the cap is $3,850 for individuals or $7,750 for families. Keep in mind that federal law restricts overall out-of-pocket medical expenses to $7,500 per individual or $15,000 per family. If you hit that amount in out-of-pocket expenses, your health insurance will cover the rest.

Both HSAs and FSAs are great options for saving money to pay for qualified medical expenses. To decide which account is right for you, carefully weigh each option – considering the pros and cons we’ve outlined – and select the one that best suits your personal financial situation as well as your and your family’s health.

Levi Crouse is human resources manager at F&M Trust.

Recent Articles
Tips for using peer-to-peer payment apps
Tips for using peer-to-peer payment apps

Tips for using peer-to-peer payment apps

February 21, 2024 / Matt Sheibley

Consider these things when filing your tax return
Consider these things when filing your tax return

Consider these things when filing your tax return

February 14, 2024 / Alyssa Proctor

Quishing attacks use QR codes to lure victims
Quishing attacks use QR codes to lure victims

Quishing attacks use QR codes to lure victims

February 08, 2024 / Ray Wills

2024 Annual Big Game Predictor
2024 Annual Big Game Predictor

2024 Annual Big Game Predictor

February 04, 2024 / Warren Hurt

How to manage your checking account
How to manage your checking account

How to manage your checking account

January 18, 2024 / Mary Kate Mumper

Just Married: Individual or joint accounts?
Just Married: Individual or joint accounts?

Just Married: Individual or joint accounts?

January 16, 2024 / Laura Lowry

What is financial wellness, and how do I achieve it?
What is financial wellness, and how do I achieve it?

What is financial wellness, and how do I achieve it?

January 09, 2024 / Meghan Heebner

Buying a car: Used, new, or leased?
Buying a car: Used, new, or leased?

Buying a car: Used, new, or leased?

January 02, 2024 / Lisa Hogue

Finding funds in an emergency
Finding funds in an emergency

Finding funds in an emergency

December 19, 2023 / Anne Bednar

Join our e-newsletter

Sign up for our e-newsletter to get new content each month.

NOTICE: YOU ARE LEAVING F&M TRUST!

You are now leaving the F&M Trust website. Links to third-party sites are provided for your convenience. Such sites are not within our control and may not follow the same privacy, security or accessibility standards as ours. F&M Trust neither endorses nor guarantees offerings of the third-party providers, nor is F&M Trust responsible for the security, content or availability of third-party sites, their partners or advertisers.