Are there any restrictions on using my FSA or HSA funds?

Flexible Spending Accounts, or FSAs, and Health Savings Accounts, or HSAs, have specific rules and restrictions regarding how funds can be utilized. FSAs typically require that the funds be spent on qualified medical expenses as defined by the Internal Revenue Service. This includes a wide range of healthcare costs such as copayments, deductibles, and certain over-the-counter medications. However, FSAs often come with a "use it or lose it" provision, meaning that any unspent funds at the end of the plan year may be forfeited, although some plans may offer a grace period or allow a carryover of a limited amount. On the other hand, HSAs offer more flexibility. Contributions to HSAs can be made through payroll deductions, and the funds can be used for qualified medical expenses or saved for future healthcare costs. One of the significant advantages of HSAs is that the funds roll over year after year, allowing for long-term savings. However, HSAs are only available to individuals with high-deductible health plans, and funds cannot be used for non-medical expenses before the account holder reaches age sixty-five without incurring a penalty. For the most accurate and detailed information, individuals should refer to their plan documentation or consult the BENEFEDS website for specific guidelines.