HRA And FSA And HSA, Oh My!
Some of the ways you can pay for medical expenses is with pre-tax dollars. A Health Reimbursement Account (HRA) is one type which is usually set aside by your employer. Money in this type of account can roll over from year to year until there are no funds left.
A Flexible Savings Account (FSA) Is usually a set dollar amount for the plan year. If you don’t use it all within that year, you loose what’s left. So with this type of account you need to plan your expenses wisely so you don’t loose out.
With a Heath Savings Account (HSA), almost anyone can set one of these up through their own bank. This is money you set aside and it can roll over from year to year, plus you can continue to add to it throughout the year.
So what types of expenses can apply? Usually copays, deductibles, prescriptions, dental, vision, and other medically related items. For the FSA and HSA the guidelines are set by the IRS. You can find what is allowable to be claimed on their website.
HRA’s are slightly different and you should check your plan to verify exactly what expenses can be claimed under it.
As with all the information I’ve provided over the last two weeks, check your plan documents. Does this seem like a lot of work? Yes, but you are paying premiums, much like you pay rent or a mortgage. Make sure you know what you are getting.
We’ll have some additional tips this weekend. Stay tuned.
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