Budgeting for household expenses can be stressful. In fact, a recent study showed that more than half of Americans would find themselves in debt over a surprise $500 expense. Medical expenses, such as the sudden or unexpected need for new reading glasses, can add stress to already tight family finances.
FSAs and HSAs allow you to plan ahead for medical expenses so they don’t cause undue strain to your pocketbook when they crop up. Although FSAs and HSAs are slightly different, both are savings accounts that you can use to help prepare for emergency medical expenses. The great thing about both of these savings accounts is they take money directly from your paycheck each pay period prior to taxes being taken out. This means that you are not taxed on the money in your FSA or HSA accounts!
What is FSA?
FSA stands for “Flexible Spending Account.” Most employers offer FSAs, even if you don’t have health insurance.
When you use an FSA, a portion of your pre-tax income can be put into your savings account automatically each pay period. However, unlike HSAs, FSAs do not roll over at the end of the year: any money you don’t spend from your FSA is lost at the end of the year. For that reason, you want to budget accordingly, only putting into your FSA what you think you’re going to spend throughout the course of the year.
As the year comes to a close, many people with leftover money in their FSA will choose to use that money on qualifying medical expenses, including reading glasses. So, if you’re looking for a fashion-forward holiday present for yourself, accessorizing with a pair of Peepers may be the perfect way to spend that leftover FSA money while simultaneously updating your wardrobe!
What is HSA?
HSA stands for “Health Savings Account.” Just like with an FSA, HSAs can take pre-tax income each pay period and place it directly into a savings account for you. However, not everyone is eligible for an HSA. These savings accounts are specifically for individuals with high deductible health plans who meet certain criteria.
Unlike FSAs, HSAs are owned by the individual, not the employer. This means that if you leave your job, you still have access to the money you put into your HSA. Additionally, money in your HSA account can roll over at the end of the year, and if you don’t wind up using the savings on medical expenses, you can eventually use the funds toward your retirement.
Purchasing Peepers Using FSA and/or HSA
Both FSAs and HSAs are there to help you save for necessary medical expenses. Reading glasses—even over-the-counter reading glasses—qualify as medical expenses under most FSA and HSA plans.
When you set up your FSA or HSA account, you should be given a card. These work just like debit or credit cards. To pay for your reading glasses with your FSA or HSA account, simply input the card information at checkout the same way you would input credit card information.
Keep in mind that while most FSA and HSA accounts will pay for reading glasses, they typically will not pay for non-corrective blue light glasses or non-corrective sunglasses. Always check with your account manager before making a purchase if you have a question about how you’re using your FSA or HSA funds.