It’s called consumer-driven because it puts you in the driver’s seat of your health and health care spending. With your checkups and preventive care likely covered at 100%, and tools to help you stay healthy and shop around for quality care at more reasonable costs - you might be able to cover all your costs with the money in your account.
It gives you the flexibility of a PPO - you can often go to doctors in and out of your network, though you’ll get better rates with in-network doctors. HSA plans tend to have lower monthly premiums than similar PPOs, and sometimes even HMOs.
It’s sometimes called a consumer-driven health plan (CDHP) because you’re in more control of your care spending at first. With your checkups and preventive care likely covered at 100%, and tools to help you stay healthy and shop around for quality care at more reasonable costs - you might be able to cover all your costs with the money in your account.
If you still have money left in your account, it stays in there for next year and beyond. And you can also take it with you if you change health plans. View IRS rules on paying costs with money in your HSA.
Your employer puts money into your health incentive account (HIA) when you take certain steps to improve your health. You use that money to pay for your share of care costs, like your deductible or coinsurance. If you don’t use all the money, it stays in there next year as long as you’re still at the same job.
1. Health care FSA for qualified medical, dental, vision, or other health care costs, including insurance deductibles, co-payments, and co-insurance.
2. Dependent care FSA for child, elder, or other dependent care.
3. Limited-purpose FSA for qualified dental and vision care costs only when combined with a Health Savings Account (HSA) or a Health Reimbursement Account (HRA).
For dependent care FSAs, you must also have children under the age of 13 (if divorced, you must be the custodial parent). Or if you have an adult you can claim as a dependent on your tax return, who’s physically or mentally unable to care for themselves.
- Before and after school care programs
- Preschool or nursery school
- Extended day programs and summer day camp
- Babysitter (in or out of your home)
- Nanny and au pair services
- Day care and elder care facilities
- Educational expenses (summer school and tutoring)
- Tuition for kindergarten and above
- Overnight camp
- Field trip expenses and fees
- Housekeeping services
- Dependent care expenses incurred if your spouse does not work, unless your spouse is a full-time student or disabled
- They allow you (and your spouse if filing jointly) to work or look for work
- They are for a qualifying person’s care
The run-out period is the time limit for submitting receipts to your Health Care FSA for expenses incurred during the plan year.