Alamo Optometry Blog

December 3, 2009

Flexible Spending Accounts (FSA) vs. Health Savings Accounts (HSA)

Filed under: Vision Care Tips — Tags: — admin @ 11:39 pm

Flexible Spending Accounts (FSA) vs. Health Savings Accounts (HSA)

(As appeared in <a href=”http://www.yourmonthlypaper.com”>Alamo Today</a>, December 2009, pg. 27)

 The holiday season has arrived and on top of all the hustle and bustle that brings, insurance decisions for a lot of people need to be made for this year and next year.  Many companies have their open enrollment during this period, so cafeteria, vision, and medical plans can be in effect as of January 1.  In addition, many of our patients want to (and often need to) fully utilize their benefits for this year or they will be forfeited.  To help clarify, here is a brief introduction to the common types of benefits that can be used at our office.
 A Flexible Spending Account (FSA) is one of a number of tax-advantaged financial accounts that can be set up through a cafeteria plan of your employer.  An FSA allows an employee to set aside a portion of his or her earnings to pay for qualified expenses as established in the cafeteria plan; most commonly for medical expenses but also often for dependent care or other expenses including eye care, dental, and orthodontics.   Money deducted from an employee’s pay into an FSA is not subject to payroll taxes, resulting in a substantial payroll tax savings.  Depending on the employer, an FSA may be utilized by paper claims or an FSA debit card,  also known as a Flexcard.  The important thing to remember is that any unused money not spent by December 31 will be forfeited by the employee.  As the end of the year approaches, it is paramount that you know how much is left in your account to ensure full utilization. 
 By comparison, a Health Savings Account (HSA), is a tax-advantaged medical savings account available to employees who are enrolled in a High Deductible Health Plan (HDHP) for your medical insurance. The funds contributed to the account can be made by both the employer and employee and are not subject to federal income tax at the time of deposit. Unlike a flexible spending account, funds roll over and accumulate year over year if not spent.  Funds may be used to pay for qualified medical expenses at any time without federal tax liability. Like an FSA, most HSA patients have a debit card that can be used to cover any out-of-pocket expenses.
 The government has a wide range of specified expenses that qualify as a medical expense.  These include any office co-pays, pharmacy bills, any necessary or elective surgical procedures (including LASIK), dental bills, orthodontics, and laboratory bills.  Included in that list is any vision correction device (glasses, computer glasses, contact lenses, sports goggles, etc.) and sunglasses (prescription and non-prescription).  As long as your purchase is made by the end of the year, it will count on your 2009 account balance. 
In addition to these tax-friendly accounts, do not forget to utilize your vision insurance.  At our office, we are providers for Vision Service Plan (VSP), Eyemed (which can include vision coverage for Anthem Blue Cross and Aetna if the plan has a eye care provision), and Medicare.  All plans have an exam benefit and have variable material allowances towards glasses or contact lenses.  Some plans recycle on the change of the new year, so this is an optimal time to use your benefits.  Between your vision coverage and your FSA or HSA, most if not all of your charges will be covered.
Since this can be confusing for some people, we are available to answer any of your questions regarding insurance and FSA/HSA utilization.  We are able to verify any insurance coverage on-line within a matter of minutes as long as we have all of the necessary information.  You will always receive a detailed receipt showing your purchase if any proof is needed by your employer.  We look forward to seeing you this holiday season and in the years to come.

Dr. K. at Alamo Optometry is your hometown eye doctor for outstanding service, vision care, and designer eyewear.  He can be reached at 925-820-6622 or visit his office at 3201 Danville Blvd., Suite 165 in Alamo.  Visit our website at: ww.alamooptometry.com.

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