FSAs and HSAs

Learn more about healthcare savings accounts and their benefits

FSAs and HSAs: What You Need to Know

Reduce your healthcare costs with tax-advantaged healthcare saving accounts — known as HSAs and FSAs. These accounts can help you save on qualified out-of-pocket medical expenses and products such as:

  • Doctor’s office visits.
  • Co-pays for medical tests and procedures.
  • Prescription medication.
  • Ambulance services.
  • Eyeglasses.
  • Contact lenses and items you need for your lenses (like cleaning solutions).
  • Pregnancy tests.
  • Durable medical equipment, such as crutches and wheelchairs.
  • Certain vision and dental care.
  • Many over-the-counter (OTC) medications and products.

You can find the full list of current qualifying medical expenses on the IRS website. Find your local pharmacy to stock up on FSA- and HSA-eligible healthcare products today.

What are HSAs?

HSA stands for Health Savings Account. You are eligible for one of these accounts if you enroll in a high-deductible health plan (HDHP). What qualifies as an HDHP changes every year. You can learn more by visiting Healthcare.gov.

You are eligible whether you buy your insurance as an individual (such as through the state healthcare exchanges) or have an employer-sponsored plan.

Benefits of HSAs

According to IRS Publication 969, HSAs offer several benefits, including:

  • You won’t owe federal income tax on contributions to an HSA. This is applicable whether contributions come from you or your employer, and whether or not you itemize your deductions.
  • The interest or other earnings in an HSA are tax-free if you use the money for qualified healthcare expenses.
  • Your HSA withdrawals are tax-free if used for qualified healthcare expenses.
  • Contributions roll over from year to year. They can stay in your account until you use them. You don’t have to use the money by the end of the fiscal year.
  • HSAs are portable. Even if you leave your employer or the workforce, you can still keep your HSA.

Important notes about HSAs

If you use HSA money for non-qualified expenses (beauty products, for example), you will have to pay the IRS a 20% penalty plus taxes on withdrawal. Some HSA accounts require you to submit receipts to prove that you used the money for qualified medical expenses. Even if your HSA doesn’t require this, you should keep all receipts for up to three years in case of an IRS audit.

You can also use HSAs as an investment tool. According to Bankrate.com, you can use an HSAs to invest in stocks, bonds, and other financial instruments. Earnings are tax-free.

Although you won’t owe federal income tax on HSA contributions, you must report HSAs on your yearly income tax return.

What are FSAs?

FSA stands for Flexible Spending Account. Unlike HSAs, which are individual plans, FSAs are employer-established benefit plans, which means you can get one of these special healthcare spending accounts only through an employer.

FSAs allow employees to get reimbursed, or paid back, for qualified medical expenses.

You can’t use FSAs for the following:

  • Health insurance premiums.
  • Long-term care coverage or expenses.
  • Amounts that are covered under another health plan.

Benefits of FSAs

FSAs offer several benefits:

  • Your employer’s contributions can be excluded from your gross income.
  • Reimbursements are tax-free if you pay for qualified medical expenses for you and qualifying family members.
  • You can use an FSA to pay for qualified medical expenses even if you haven’t funded the account yet.
  • You don’t pay federal income tax, social security, or Medicare on the money that you or your employer contributes to the FSA.

Important notes about FSAs

You lose any funds you don’t use by your employer’s claim deadline. They can’t be rolled over. FSAs aren’t portable—they don’t move with you if you leave your job. And unlike HSAs, you don’t need to report FSAs on your yearly income tax return.

Using your HSA and FSA

Find your local pharmacy to stock up on FSA- and HSA-eligible healthcare products today. Below are some of the products and product categories that are eligible. Ask your pharmacist if you have any questions about which OTC items are FSA-eligible.

  • At-home COVID-19 tests
  • Allergy and sinus
  • Antacids
  • Diabetes care
  • Condoms
  • Contact lenses and supplies
  • Cough, cold, and flu
  • Denture creams and cleansers
  • Diabetes care
  • Eye drops
  • Face masks and hand sanitizer
  • Feminine care
  • First aid supplies and kits
  • Home healthcare
  • Incontinence products
  • Laxatives
  • Pain relief
  • Pregnancy and fertility tests
  • Prenatal vitamins
  • Reading glasses
  • Shoe insoles and inserts
  • Smoking cessation
  • Sun care
  • Thermometers
  • Vaporizers and inhalers

FSA/HSA Eligible without Prescription*
Find your closest store

SPONSORED

Zyrtec 24-Hour Allergy Relief

Zyrtec 24-Hour Allergy Relief provides relief for your worst indoor & outdoor allergy symptoms, including runny nose, sneezing, and itchy, watery eyes, nose, and throat. From the #1 allergist-recommended brand among over-the-counter oral antihistamines, get powerful relief from your worst symptoms.

Find a Store
SPONSORED

Imodium A-D Caplets

Imodium A-D caplets work faster than prescription to slow down your system and restore its natural rhythm. From the #1 doctor-recommended anti-diarrheal brand, Imodium A-D is easy to use at home, or on the go for adults and children ages 6 and up.

Find a Store
SPONSORED

Visine Dry Eye Relief Lubricant Eye Drops

Visine Dry Eye Relief Lubricant Eye Drops provide temporary relief of burning and irritated eyes. Designed to work like real tears to moisturize and soothe, Visine Dry Eye Relief Lubricate Eye Drops protect against further eye irritation to moisturize and soothe dry, gritty eyes.

Find a Store
SPONSORED

Band-Aid Brand Sterile Flexible Fabric Adhesive Bandages

Sterile flexible fabric adhesive bandages are ideal for minor wounds, cuts, scrapes, and burns, and perfect for first aid kits. Stays on for up to 24 hours with a hurt-free pad that won’t stick to wounds, allowing gentle, pain-free removal and promoting faster healing.

Find a Store
SPONSORED

Neosporin Original Topical Antibiotic Ointment

Antibiotic ointment for treating minor cuts, scrapes, and burns. Provides 24-hour infection protection for minor wounds, while nourishing skin to minimize scars after healing. Cover with a Band-Aid Brand Adhesive Bandage for extra protection.

Find a Store
SPONSORED

Motrin IB Tablets

Motrin IB Tablets provide relief from minor aches and pains and temporarily reduces fevers. Safe and effective when used as directed due to the common cold, headache, muscular aches, minor pain of arthritis, toothache, backache, and menstrual cramps.

Find a Store
SPONSORED

Tylenol Extra Strength

Tylenol Extra Strength caplets reduce fever and provide temporary relief of minor aches and pains. From the #1 doctor-recommended brand for pain relief and fever reduction, each 500 mg caplet provides effective, extra-strength pain relief for adults and children 12 years and older.

Find a Store
SPONSORED

Original Strength Pepcid AD All-Day Heartburn Relief Tablets

All-Day Heartburn Relief tablets prevent and relieve heartburn due to acid indigestion and sour stomach. Just 1 tablet controls acid all day or all night. Take 60 minutes, or as little as 10 minutes before eating food and beverages that contribute to heartburn.

Find a Store

*Check your plan for details. You may save an average of 30% when you use pre-tax dollars to pay for eligible FSA/HSA expenses.