“All you need is love …” We’ve all heard that before, but is it really true? Fact is, being in a loving relationship provides all sorts of health benefits. Fewer doctor’s visits, less depression and substance abuse, lower blood pressure, and less anxiety, among other boosts to your health and well-being. However, what happens when love is just not enough and you have medical needs to take care of?
The cost of healthcare is expensive. That’s where a tax-advantaged healthcare benefits account can help you heal. Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) give you a financial tool to cover many out-of-pocket medical expenses – including those related to heart health. Check out these six reasons to love your FSA:
Six Reasons to Love Your FSA/HSA
1. Reducing your taxable income
When you put money in your FSA/HSA, you owe less to the IRS. Think about this. Let’s say you make $40,000 per year and you’ve elected to put $2,000 in your FSA or HSA. The IRS only will tax you on the remaining $38,000. The money you put in your account is pre-tax.
2. Tax-free usage
When you use your FSA/HSA for qualified healthcare expenses, you don’t have to pay taxes on the withdrawal amount. The purchase may be subject to sales tax, however.
3. Family matters
You can use your FSA/HSA for yourself and your qualified dependents. That can include your spouse, children, and other dependents such as an elderly parent. Best part is, they don’t have to be on your health insurance plan; they just have to be listed as a dependent on your income tax return.
4. Lots of spending options
The IRS has approved hundreds of items and services as FSA/HSA-eligible. Common expenses include over-the-counter medications, prescriptions, copays, deductibles, dental visits and procedures, and eye exams and procedures, among others. Some heart/love related items and services that are IRS-approved include:
- Blood pressure monitors
- Birthing classes (may need Letter of Medical
- Breast pumps
- Family planning items
- Health screenings
- Heart procedures
- Home defibrillators
- Smoking cessation classes and products (may
Health Savings Accounts have rollover every year, no matter what. If you don’t use all of the money you allocated to the account, it stays in the account and continues to grow.
For FSAs, many employers also now offer up to $550 in carryover. If your plan offers FSA carryover, you can keep up to $550 in unused funds for the next year. If you don’t have carryover, your plan may offer a grace period of up to 2.5 months to spend any remaining dollars.
6. Cash flow assistance
Here’s another reason to love your FSA. FSAs come with a special provision called the uniform coverage rule. Basically, it means that you can access the full amount of your annual election on the first day of the plan year.
For instance, during enrollment season you chose to put $2,000 in your FSA. Then, on January 1, you had to go to the emergency room and were charged $2,000. You can use the full amount of your FSA election, even though your contributions haven’t totaled up to that amount. Each pay period, you will still have that money deducted from your pay check – though the available benefit is now $0. Think of it as an interest-free loan.
LOVE your FSA/HSA healthcare benefits accounts. It’s your money to spend. You have many options to choose from that can help you live healthier and be happier.
For more tips on heart health, check out the American Heart Association’s web page.