Flexible Spending Account (FSA) Basics & FAQs (for 2022 & 2023)

This article has been updated for the 2023 and 2023 tax years. I’ve gone in to great detail on my love for health savings accounts (HSAs) in the past, but also want to pay some attention to their cousin, the flexible spending account, aka an FSA (note: the IRS refers to them as “flexible spending arrangements“, but I have never heard anyone else use that term).

First, let’s recap what HSAs are so you can see the difference between an HSA and FSA. HSAs are tax advantaged savings accounts that can be used to pay for eligible medical expenses. They are paired with high deductible health plans (HDHPs). Tax-free (pre-tax) contributions and withdrawals for qualified medical expenses, employer contributions, and growth through investments make them an outstanding option for those who are eligible.

But, there’s a rub. In order to be eligible to contribute to an HSA, you must be currently enrolled in an HDHP. What if you are not enrolled in an HDHP? Then, you should give some…

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This article was written by G.E. Miller and originally published on 20somethingfinance.com