Health savings accounts can be very important to your personal finance, and they work in conjunction with your health insurance. There are three types of health savings accounts. One is called a Flexible Spending Account or FSA, another is called a Health Savings Account or HSA, the third is a Medical Savings Account or a MSA. There are significant differences between the three when it comes to end of year strategies.
Let’s take a look at the HSA account first. The HSA account is for individual who have high deductible health insurance. The MSA account was designed for self employed individuals. These types of accounts as well as the FSA account are ways to save money for medical expenses. FSA accounts are normally offered through the business that a person works for as an employee.
At the end of the year the money that is in your HSA or MSA account will roll over to the next year so that you will be able to use that money and/or add to it in the next year. The FSA account, however, does not rollover to the new year, and any money left in the account is forfeited.
The Federal Government regulates all health spending accounts. Since we are getting so close to the end of the year, here are some ways to use the money in your FSA account.
If you need glasses, have an eye exam and purchase them before the end of the year.
If you have any prescriptions that your health insurance will allow you to purchase, do it before the end of the year.
Visit your dentist for a teeth cleaning.
If you need dental work, do it before year end.
Examine your records, make sure you have submitted everything, and have receipts. If you are missing any receipts, be sure to contact your provider to obtain documentation.
These spending accounts can be useful to your personal finance in order to reduce your tax obligation, but if you don’t plan appropriately you can lose money.
You can also lose money on health savings accounts if you don’t know how they work. You can get reliable information on how health savings accounts work by going to the IRS site and looking here. You will need to check each year to see if there have been any changes made to these types of accounts.