FSA? HSA? WTF?

Whether you’re planning for kids or not, taking a look at your finances and medical budgets is important. Health care costs can add up quickly; even healthy, uncomplicated pregnancies can be expensive. Unexpected trips to the emergency room can wipe out your savings.There are a few ways to tackle your finances, such as utilizing an FSA (Flexible Spending Account) or an HSA (Health Savings Account). HSAs and FSAs are accounts that you contribute to, tax-free, to save for health care costs. Understanding the difference can help you plan, save money, and make the best decisions you can for yourself and your family. We're here to answer your frequently asked questions about them.

HSAs and FSAs allow you to put pre-taxed money away from your paycheck to use for health care costs. These expenses include insurance deductibles (the amount you pay before your health insurance provider begins to cover the costs of medical services), copayments (the amount you pay for healthcare before your insurance company will chip in) and coinsurance (a percentage of the costs of medical care that you pay) and prescription drug costs.

You can also use the funds for expenses related to birth control, abortion, gender confirmation surgery, hearing, travel for medical care, acupuncture treatments, chiropractor visits, mental health counseling, drug abuse counseling and service animals. If you don't have dental coverage or vision insurance, or even if you do, you can use the money for expense that those don't cover.

You can even use them for your Modern Fertility test - just send us an email for an itemized receipt, and you’ll be able to utilize your funds to understand your body and fertility!

So how much should I put in my FSA or HSA? Take a look at your insurance company's plan. What are your deductibles? Consider any monthly or expected health care costs and also calculate the costs of your regular, yearly doctor appointments. (Be sure to think about those dentist trips and visits to the eye doctor as well!) These costs can help you set a baseline for your FSA or HSA contributions. Because details might vary based on your specific health insurance plan or employer, make sure you do your research before counting on the money.

When it comes to choosing between an FSA and HSA, one basic difference can make the choice easier: HSAs are not available to everyone; you must be enrolled in a health insurance plan with a large deductible to qualify.

If you have a health insurance plan known as a “High-Deductible Health Plan,” a Health Savings Account is an option for you. For 2018, a qualifying high-deductible health plan means having a deductible of $1,350 or more - or $2,700 or more for a family. (Not all plans with deductibles over these limits qualify for HSAs, so it’s important to check with the insurance company before you make any decisions.)
To qualify for an HSA, your high-deductible health plan must be your only medical insurance plan. You also won’t qualify for an HSA if you are eligible for Medicare, Medicaid, or if you are claimed as a dependent on someone else’s tax return.

The nitty-gritty details of an HSA are important: you can only access what you’ve contributed at the time - and for 2019, contributions to an HSA are capped at $3,500 for individuals or $7,000 for families. What does this mean? Great question - it means you can plan to contribute $3,500 a year, but you can only withdraw what you’ve already contributed. If you have a health emergency and you’ve only contributed $1,000 at that point in the year, that’s all you can use from your HSA.

On the other hand, there are no eligibility requirements for an FSA beyond being employed. If you’d like one, you can have one––and you can contribute up to $2,650 yearly. (Unfortunately, if you are self employed or a freelancer, you cannot set up an FSA.) If you do opt into an FSA, it’s important to note that your contribution amounts can be adjusted only at open enrollment or with a change in employment or family status. This is a big difference from HSAs where you can change how much you contribute to the account at any point during the year.

One other key difference between an FSA and an HSA is how much you can access at any given time. With an FSA, you have access to the entire amount of your FSA from the get-go––even if you haven’t yet contributed the entire amount. So, if you contribute $200 a month, you can utilize your entire planned contribution of $2,400 during month one.

There are plenty of ways to utilize your FSA. We talked to three people about how they used theirs.
Rachel, a marketing manager in Tennessee, managed to submit prescription drug costs from her dog’s long illness to her FSA., “Back when I had an FSA (about 6 years ago) I was able to use it to pick up prescription drugs for the dog at Walgreens. She was on prednisone and a couple of other medications. I was able to have the vet call into Walgreens to save us money. I bought a pill cutter to cut pills down to the sizes they needed to be, and just filled them at Walgreens. I was able to submit the receipts to FSA with no questions. It was extremely helpful during a (very expensive) long-term illness for her.”

Before the Patient Protection and Affordable Care Act (ACA), funds not used by the end of the year were forfeited. This was colloquially known as the "use it or lose it" rule. Now plans allow you to hang onto up to $500 of leftover funds as you head into the next year. If you’re reaching the end of the year and you have more than $500 in your account, think about what you’ve been putting off. Need a new pair of glasses? Now might be the time! Have questions about your fertility? Why not do some testing!

David, a communications professional, shared that one year he bought “huge containers of every kind of band-aid and over-the-counter medicine I could think of” when the year was coming to a close. He admits that after his poor planning, he learned to reduce how much he put into his FSA.

Melissa plans a New Years Eve shopping spree. “For the last two years I’ve gone to the pharmacy on New Year’s Eve and bought condoms, band-aids, vitamins, and contact solution to empty our family’s FSA. Before [my son] was potty trained we even used the funds for diapers and pull-ups!” Melissa, a Nashville based architect, was quick to add, “the cashier is always surprised when I show up with baskets full of condoms.”

So what should you choose? And how much do you put away? If your company has an HR department, they might be able to offer you some advice. Both options help you manage those out-of-pocket costs and will save you money since your contributions are tax-free. An HSA means you can put more money away, and you can also easily transfer your funds if you leave your job. But if you don’t qualify for an HSA, and FSA is the way to go!

No matter what you decide, it’s important to plan (and save) for the future. While you’re planning, checking on your fertility is a great idea. Modern Fertility can offer you the knowledge you need to think about your fertility, your timeline, and your next steps.


Jordyn Rozensky

Jordyn Rozensky is a writer and photographer living in El Paso, Texas. Their work has been featured on a variety of publications including CNN and NPR. Follow their photography on Instagram @jordynrr.

Fertility Unfiltered