Using HSA vs FSA for eye care expenses - Smart Vision Labs

HSA vs. FSA for Eye Care

Now is the time to deal with your Flexible Spending Account (FSA) or Health Savings Account (HSA). Although they are similar in many ways there are a few key points which affect how you can (and should) spend them. If you have money you want to use for vision care or you’re looking to open a new account, here are the similarities and differences between an FSA and HSA.

What’s the Same?
Both the FSA and HSA are tax-free, have a maximum contribution limit, and can be used for eye care expenses.

Tax-Free Saving and Spending
Money put into and taken out of one of these accounts and used toward healthcare (like vision exams or eyeglasses) is tax-free. This allows the same amount of money to actually go farther than an equivalent amount in cash. If you were to use $1,000 from your HSA or FSA to meet your new year’s resolution of taking care of your eyes, all of it will go directly to that goal. You don’t lose any of it to taxation.

Contribution Limits
Only a certain amount of money can be put into each type of account per plan year. In 2016, an individual can put a maximum of $3,350 into their HSA (including any matching their employer might offer). For an FSA, this amount is $2,550.

In 2017, the IRS is allowing a small increase in contribution limits. For self-only coverage, you can add $3,400 to your HSA. With an FSA, the limit also increases $50, for a total of $2,600.

Vision Care
Both HSA and FSA funds can be spent to take care of your vision and maintain your eye health. Vision test and eye exam? Check. Contacts or glasses? Check. Everything from the diagnosis down to contact lens solution are generally allowed expenses for both HSAs and FSAs.

What’s Different?
Only an FSA has a time limit and only an HSA requires you to carry certain insurance.

Time Limit
One of the most important differences between these accounts is that the FSA funds must be spent within the plan year. It is a “use it or lose it” scenario. While some FSAs do have some type of extension, they are limited (if they exist at all). These provisions are either allowing a few hundred dollars to rollover or for an extra month or so to spend it. For an FSA, you should only contribute what you plan to spend in that year.

An HSA does not have a time limit to spend the funds. For this type of account, ideally you contribute the maximum possible so there are more funds to spend if or when you need them.

Eligibility Requirements
HSAs have different eligibility criteria than FSAs. One of these is a high-deductible health plan (HDHP). The other is you must be under 65 years old when you open the account. The HDHP needs to be your only insurance plan, although you can still have coverage for dental and vision. However, unlike the FSA, your HSA is not tied to your employer.

Each of the three available types of FSA have varying requirements which must be met. The standards they share are the FSA must be offered by an employer and, because of this, you cannot be self-employed. The type of insurance you have doesn’t affect your ability to have an FSA. You may even be able to have multiple FSAs, depending on your employment.

Both?
It is possible to have both an HSA and an FSA, with certain restrictions. If you already have an HSA, you can also start an FSA but it will be limited to only purchases for vision and dental care.

If you have one of these accounts, don’t forget they are meant to be used. Investing now is a way to protect the quality of your vision in the future.

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Health Savings Account Q&A

As the year comes to an end, you may have questions about your Health Savings Account, or HSA. This quick guide should help answer them.

Why have a Health Savings Account?

An HSA is meant to give plan owners more control over their medical expenses. The person who opens the account also controls the funds that go into it. This accomplishes two things:

  • It stays with you between jobs. Your employment status does not change the presence of the HSA.
  • It is tax-exempt. The money you put in goes further when you need to spend it.

What is this about Health Savings Account being tax-exempt?

The money that goes into your HSA is protected from taxation at every step of the transaction. It doesn’t get taxed going into or out of the account. The only catch is that you use it for medical expenses.

What are medical expenses?

These are items or procedures you have an actual health need for. Everything from LASIK surgery to contact lens solution is an allowable expense.

What is the catch?

Outside of needing to use the funds on medical expenses, there are two other things you should know about your Health Savings Account.

  • There is a contribution limit. Each plan year, you can contribute a limited amount of money to the account. For 2016, you could contribute a maximum of $3,350 if you had an individual insurance plan and up to $6,750 if you had a family plan.
  • You need to have a High Deductible Health Plan (HDHP) to qualify to open an HSA. A HDHP has a minimum deductible of $1,300 for a single person and $2,600 for a family.

Why a Health Savings Account instead of a bank account?

The HSA is an account that you add money to (tax-free) until you need to make a withdrawal for medical expenses (also tax-free). You could just set aside money into a bank account but you would have less because of taxes. Also, because HSA funds must be spent on medical expenses or supplies, it ensures that the money that goes in actually goes to those items.

Does my HSA expire?

Unlike an FSA, the funds in your HSA do not have to be spent in the plan year.

So then, why should I spend any of it? Wouldn’t it be better to save it all?

One of the main concerns with an HSA is people who refuse to spend it even when they need medical care. Your health should always be the number one priority over saving money in an account. Especially when dealing with eye health and vision quality, it is better to take preventative steps than have to treat major problems later on.

How do I use my HSA for vision care?

The funds in an HSA can be used for all aspects of vision care. No matter which step you are on, you can spend HSA money on it (as long as it comes from a medical need, such as having astigmatism). Vision exams, visits to the eye doctor, glasses, contacts, and everything that goes with them are okay to purchase.

So don’t forget to actually make use of your HSA. Health comes before savings. It’s right in the name.

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Use Your FSA Dollars on Vision Exams and Related Vision Expenses - Smart Vision Labs

Seven Ways to Spend Your FSA Dollars

The money in a Flexible Spending Account (FSA) has to be used within the plan year. As your deadline grows nearer, you may be struggling with ways to use your funds so you don’t lose them.

Fortunately, FSAs are true to their name. They are quite flexible in how you use the money, so long as the funds go toward a medically-related need. Money spent on vision exams and ways to improve eye health would qualify. Don’t leave funds in your account; here are seven ideas on how you might use your FSA dollars to see better.

Vision Exam

If you suspect your eyesight might be sub-par, or if you just haven’t had it checked in a while, a vision exam is a great start to spending some of those FSA dollars. This money may be used to offset a deductible you have on vision insurance or it can be used to pay for an exam. This simple test may alert you to the need for a more thorough checkup, let you know why you’ve been getting those headaches after reading, or just assure you that your vision is indeed perfect.

Eye Checkup

Even if the results of your vision exam were 20/20, you should still visit an ophthalmologist for a more comprehensive checkup. Eye doctors have access to tests and equipment that may catch issues which affect your eye health, even if they aren’t causing vision problems yet. It’s recommended you go every two years; perhaps this is the year for you?

Glasses

Let’s assume your vision isn’t as great as you thought it was. (It happens. Vision problems can progress slowly and sneak up on you.) Some research on the pros and cons of glasses might be your next step. Prescription glasses are relatively low maintenance, improve vision, and can be a great fashion statement. Your FSA dollars can be used for corrective glasses.

Frames

If you already choose glasses as your vision-correcting method, maybe you’d like some new frames to refresh your look. Do you rely on your glasses all the time? Maybe you would like to invest in a second pair in case something happens to your main one. A backup pair of glasses is also recommended for contact lens wearers. If they happen to develop an eye infection or are just experiencing irritation, they should have a pair of traditional glasses as well to allow their eyes to heal.

Contacts

Are glasses incompatible with your current lifestyle (or just your style in general)? You might decide to use your FSA dollars on contact lenses. Contact lenses provide clearer vision, better peripheral vision, and are more suited to an active lifestyle than eyeglasses.

Solution/Cleaner

The items required for maintaining your contact lenses, such as solutions and cleaners, are also generally allowable expenses for an FSA. You definitely want to make sure you only use solutions on your lenses that were made just for contacts. Because contacts rest directly on your eye, it is important to care for them properly to prevent problems such as irritation.

Sunglasses

Although they may seem more like a luxury than a necessity, prescription sunglasses are good for far more than fun in the sun. If you are already wearing prescription eyeglasses, you need accompanying sunglasses to protect your eyes from harmful UV rays.

It is worth noting that some FSAs carry a type of limited extension. It may be in the form of a leeway period of about 2 months or by allowing some of it to carry-over into the next plan year (up to $500). The options which may be available to you depend on what your employer chose; they can offer one of these (or neither), but not both.

Like with the extensions, what each plan covers can vary. Before you spend, check to make sure your particular plan covers what you want. And remember, reading over the requirements of your FSA might be easier after an eye exam and corrective lenses, if necessary. Use your FSA dollars to maintain eye health; these plans make it possible and completely affordable.

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How to Use Your HSA for Eye Care

Do you have an HSA but aren’t sure how to use it to get the most benefit? Are you not quite sure what it even is?

HSA stands for Health Savings Account. It works like a regular savings account but for health care costs. The money that goes into and out of the account is controlled by the person who opened it, not their employer or insurance company. It is meant as a way to allow the person with the account more control over their health care spending.

There are several reasons someone might open an HSA. Because you own the account, it will remain unaffected by any changes in your employment. The funds do not have to be used by a certain date. The money that goes in stays there until you take it out for a medical expense. It also cannot be taxed, as long as you use it for health care purchases. If circumstances arise and you do need money from the account for non-medical expenses, you can take it out, but it will be taxed.

However, not everyone qualifies for one of these accounts. You must be under 65 years of age and carry a high-deductible insurance plan. Also note that having coverage for things like vision or dental care does not affect your eligibility to start an HSA.

Use Your HSA

The trade-off for possible out-of-pocket expenses now is definite protection against future health care costs. For example, the kind of person who would benefit most from an HSA is young and healthy with enough cash on hand to cover unforeseen medical costs. If they remain in good health when they are young, the money will already be set aside for them when they are older and more likely to need it. Because they directly control the money in the account, they can shop around for the best deal on their purchase. In addition, the HSA will contain funds from your contributions as well as money saved by not paying taxes on it, all of which have a financial benefit.

Checkups to maintain your eye health are a great way for you to use your HSA funds. There are many treatable eye conditions which, if left unnoticed or untreated, can lead to permanent vision loss. Even if you currently have good eye health and vision, you should still get your vision tested and visit an ophthalmologist at least once every two years. As eyesight can deteriorate gradually, you may not notice a change until an exam detects it. And a licensed ophthalmologist can perform other tests, such as dilation, which can lead to a diagnosis of serious problems early on so they can be treated. If you do need vision correction, glasses, contacts (as well as accompanying items like solution), and even laser eye surgery, you will be happy to know that all are allowable expenses for you to use your HSA funds.

An HSA provides a way to take control of your health care spending – just don’t forget to actually get that health care. Spending a little on routine checkups now will help safeguard you from larger and more costly conditions later.

When you use your HSA money for eye care, you are investing in a better future for yourself. Vision is priceless; use your health savings account to protect one of your most valuable assets.

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flexible spending account - use your FSA money to get a Smart Vision Exam

Don't Leave Money on the Table!

If you have a flexible spending account (FSA), don’t let that money go to waste. Apply it to your next eye care purchases. But time is ticking; you only have until the end of the year to literally use it or lose it.

What is an FSA?
This is an employer-sponsored contribution health plan. You can put aside money from your paycheck (before taxes) that you can use for certain health care expenses. You may deposit up to a certain amount of money per year; this figure is determined by an agreement made between you and your employer. The maximum contribution for 2016 is $2,550, but you need to use this money before the end of the year. Some plans offer a grace period in which you may carry over unused FSA dollars into the first part of the next year, but the best place for that money is to use it as it was intended.

Vision Care Purchases
Your FSA spending account can be used to buy prescription eyewear. This money is also not tied to any vision care insurance you may or may not have, so you may use your FSA independently of any insurance restrictions or requirements.  This spending account is money that you chose to set aside for health care expenses and the only rule you are faced with is spending it before the program’s annual deadline, which is December 31.

The money in your FSA can be used to support eye care and includes the purchase of prescription eye-wear, progressives, frames, and even reading glasses.

If you already have corrective eyeglasses, consider spending your FSA money on a second pair or treat yourself to a new look. Update your eyewear with trendy new frames or go for a style that you may have been thinking about but needed an ‘excuse’ to try.

And don’t forget that prescription sunglasses can be purchased with this money as well. Sunglasses are vital to protecting your eyes from UV rays that can compromise your eye health. Over time this exposure can contribute to cataract formation or damage the retina which can lead to macular degeneration.

If you wear contacts, the lenses and cleaning solution are usually allowable expenses with a FSA account. Since daily wear and extended-wear contact lenses have a shelf life of up to four years, some people buy a supply to last for the upcoming year. This is an excellent way to use this money and you may also get bulk discounts for purchasing a larger quantity. If you are concerned that your prescription may change during the year, don’t worry, most optical providers will let you return unopened contact lenses.

Or maybe you would like to spend your FSA money on computer glasses? These are a must-have for anyone who spends a lot to time sitting in front of a computer monitor. These glasses are specifically designed to improve your vision by reducing the glare from the monitor, increasing the contrast of the lighting, and maximizing what you see through your lenses. Ask your eyecare professional if they are right for you.

But let’s not forget the one very important way to use these FSA dollars: get a vision exam. This account can be used to offset deductibles and co-pays if you already have vision insurance.  Or it can help fund a vision exam all by itself.

Make the most of your FSA spending account. Don’t leave this money on the table; invest it in your eye health.

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