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Frequently Asked Questions
If my employee used their FSA debit card at a hospital or dental office, shouldn’t the claim be automatically approved?
Unfortunately, not all expenses from a hospital or dental office are FSA-eligible. For example, some hospital gift stores sell flowers that could still be coded as “hospital” expenses, and some dental offices provide elective services like teeth whitening that could still be coded as “dental” expenses. Unfortunately, these are not FSA-eligible. By obtaining supporting documentation, we’re able to verify the eligibility of the expense to maintain compliance with IRS regulations.
What type of detail needs to be included in my employee’s FSA claim documentation?
The IRS requires that participants provide:
- Date service was received or purchase made
- Description of service or item purchased
- Dollar amount (after insurance, if applicable)
- Name of merchant/provider
What is a Health Savings Account (HSA)?
An HSA is a tax-advantaged personal savings account
that can be used to pay for medical, dental, vision
and other qualified expenses now or later in life.
To contribute to an HSA you must be enrolled in a
qualified high-deductible health plan (HDHP) and your
contributions are limited annually. The funds can
even be invested, making it a great addition to your
retirement portfolio.
Why should I participate in an HSA?
Funds contributed to an HSA are triple-tax-advantaged.
1. Money goes in tax-free. Most employers offer a payroll deduction through a Section 125 Cafeteria Plan, allowing you to make contributions to your HSA on a pre-tax basis. The contribution is deposited into your HSA prior to taxes being applied to your paycheck, making your savings immediate. You can also contribute to your HSA post-tax and recognize the same tax savings by claiming the deduction when filing your annual taxes.
2. Money comes out tax-free. Eligible healthcare purchases can be made tax-free when you use your HSA. Purchases can be made directly from your HSA account, either by using your benefits debit card, ACH, online bill-pay, or check – or, you can pay out-of-pocket and then reimburse yourself from your HSA.
3. Earn interest, tax-free. The interest on HSA funds grows on a tax-free basis. And, unlike most savings accounts, interest earned on an HSA is not considered taxable income when the funds are used for eligible medical expenses.
What expenses are eligible for reimbursement through my HSA??
Health plan co-pays, deductibles, co-insurance, vision, dental care, and certain medical supplies are covered. The IRS provides specific guidance regarding eligible expenses. (See IRS Publication 502).
Am I eligible to participate in an HSA?
In order to contribute, you must be enrolled in a qualified HDHP, not covered under a secondary health insurance plan, not enrolled in Medicare, and not another person’s dependent. There are no eligibility requirements to spend previously-contributed HSA funds. Check with your Employer’s Benefits contact regarding HDHP offerings at your organization.
What is a high-deductible health plan (HDHP)?
A HDHP is a health insurance plan with deductible amounts that are a minimum (as of Jan 1 2026) of $3,400 embedded for individual or $6,800 embedded for family coverage. The IRS sets these amounts each year, and typically increase slightly from year to year.
How do I contribute money to my HSA?
Payroll deduction is most likely offered by your employer. Your annual contribution will be divided into equal amounts and deducted from your payroll before taxes. Direct contributions can also be made from your personal checking account and can be deducted on your personal income tax return.
Can I change my contributions to my HSA during the year?
Yes. You will not be subject to the change-in-status rules applicable to other benefit accounts. You will be able to make changes in your contributions by providing the applicable notice of change provided by your employer.
How much can I contribute to my HSA?
For 2026, the IRS has set the maximum HSA contributions at $4,400 for self-only coverage and $8,750 for family coverage. Individuals aged 55 or older can make an additional $1,000 “catch-up” contribution. The IRS changes these amounts from year to year, so check back for updates!
Do I have to spend all my HSA contributions by the end of the plan year?
No. HSA money is yours to keep. Unlike a flexible spending account (FSA), unused money in your HSA isn’t forfeited at the end of the year; it continues to grow, tax-deferred.
What happens to my HSA if my employment is terminated?
HSAs are portable and move with you if you change employment. Your HSA belongs to you, not your employer, just like your personal checking account.
How do I access the funds in my HSA?
Your HSA is similar to a checking account. You are responsible for ensuring the money is spent on qualified purchases only and maintaining records to withstand IRS scrutiny. Payments can be made via check, ACH, online bill-pay, or debit card, depending on what is available to you.
What happens if I withdraw the money from my HSA for non-healthcare purchases?
If you withdraw the money for an unqualified expense prior to age 65, you’ll be subject to your ordinary income tax, in addition to 20% tax penalty.
You can withdraw the money for any reason without penalty after age 65, but are subject to applicable income taxes.