Health Savings Accounts
and Flexible Spending Account Funds

Health savings accounts

Contributions to health savings accounts (HSAs) must be made by April 15 of the following year. If you have a high-deductible healthcare plan, you may be eligible to open and fund an HSA even if your employer doesn’t sponsor one as a part of their benefit package. These accounts are unique in that they can be triple-tax free. Contributions are deductible (up to annual limits), the funds grow tax-free and withdrawals are tax-free when used for eligible medical expenses. In 2023, an individual can contribute up to $3,850 for the year to their HSA. An individual with family coverage can contribute up to $7,750 for the year.

Flexible spending account funds

Unlike funds in HSAs, flexible spending account (FSA) funds do not rollover from year-to-year. Each plan is unique, but generally they are a use-it-or-lose it account and qualified expenses often need to be incurred by December 31. It is not uncommon to overlook funds set aside in FSAs, so take a moment to confirm the deadline for your FSA, review any outstanding balances and plan to use them up before year end. 

Some plans may allow for a small balance, $615 in 2023, to be rolled over to future years if done within a specific time frame. Check with your employer to verify the exact rules and deadlines applicable to your FSA.

Additional consideration

If you have already met your health insurance plan’s annual deductible, consider incurring any additional medical expenses before the end of the year, at which point your annual deductible will reset.