The holiday season is here and we’re flexing our gift-giving muscles with a $600 LASIK discount during the Holidays of LASIK at nJoy Vision.
Speaking of flexing this holiday season, it’s the perfect time of year to put that Flexible Spending Account (FSA) or Health Savings Account (HSA) to good use. Whether you use yours on yourself or a family member, there’s no bigger flex than giving the gift of LASIK.
Use Your FSA or HSA on LASIK
Using a tax-advantaged medical plan is an excellent way to meet your LASIK costs. When you sign up for HSA and FSA, you will use your pre-tax funds to meet medical needs. As a result, you can get high-quality healthcare without using out-of-pocket money.
The IRS released the 2022 tax year contribution guidelines for the Health Savings Account (HSA) and the Flexible Spending Account (FSA) in early November 2021. These guidelines show that LASIK is an eligible medical expense.
Flexible Spending Account
An FSA can be used for medical expenses, drug costs, deductibles, and copayments. FSA funds are not taxed, and this will reduce your overall tax payments. You can finance the FSA account yourself, or your employer can voluntarily do it. As a result, you should know your employer’s FSA policy and sign-up process.
The annual FSA contribution limit for 2021 was $2,750. This limit is for each of your participating employers. Therefore, you can contribute more than $2,750 if you have multiple employers.
The money in an FSA can pay for qualified dental and medical expenses. Dependents and spouses can also benefit from the account. Before you can use the FSA, you must prove that you have paid for a certain medical expense. Moreover, the FSA will reject your request for funds if your current insurance plan can pay for the medical expenses. If your application is accepted, you will receive reimbursement.
Key FSA Details
Here are some important things to know about using your FSA. Check with your benefits department for your plan’s details.
- Your FSA money can pay for copayments and deductibles, but you can’t use it to settle your insurance premiums.
- FSA can pay for most medications provided that you have a doctor’s prescription.
- Some FSA plans can help to purchase medical equipment such as bandages and diagnostic kits.
- Generally, you need to use your FSA funds by the end of the calendar year. However, you may be able to carry over all unused funds from 2021 into 2022.
- If you didn’t spend all of your 2020 FSA dollars, you may be able to use those until December 31, 2021.
Health Savings Account
An HSA is a savings account that can pay for certain medical expenses. The untaxed funds in an HSA account can meet co-insurance, copayment, and deductibles expenses. Using an HSA account lowers healthcare costs because the IRS doesn’t tax HSA funds. However, you can’t use the HSA funds to pay for your insurance premiums.
You have unlimited access to the money in your HSA, but the account must be supported by a High Deductible Health Plan (HDHP). The deductible health plan will only cater to preventative health services. The 2022 HDHP deductible minimums for families and individuals are $2,800 and $1,400, respectively.
HSA funds do not expire at the end of the year, and you can roll them over to the following year. It’s also possible to earn non-taxable interest on HSA contributions.
The advantages of an HSA include:
- You have complete control over the funds in your HSA. Your employer can contribute to the account, but they won’t have a say in how the money is spent.
- You will reduce your tax payment since HSA funds are tax-deductible.
- Income or interest from HSA investment has a 0% tax charge.
- You will always benefit from the funds since the money rolls over to the following year.
- People aged 65 and below can use HSA funds for certain medical expenses, such as LASIK, at a 0% tax rate.
- People over 65 can withdraw money from their HSA account and use it for non-medical expenses. However, they will have to pay income tax in this case.
Differences Between FSAs and HSAs
Both HSAs and FSAs allow people to set aside money for medical expenses, but the two plans have some differences. The main difference between FSA and HSA is that your employer controls the FSA funds, while the individual controls the HSA account. In addition, funds in an HSA account can roll over to the next year while FSA money typically expires at the end of the plan year. However, due to an increase in funds going unused during the COVID-19 pandemic, Congress changed the carryover rules and 2020 and 2021 funds may be available through the next calendar year).
Here are the differences in detail.
FSA: You have to show proof of medical expenses before you can get reimbursement.
HSA: You can use savings for non-medical expenses, although this will attract an income tax charge.
FSA: Only an employer can set up an FSA account.
HSA: An individual or their employer can set up an HSA account.
FSA: For 2022, the maximum annual contribution is capped at $2,850 per individual.
HSA: For 2022, The maximum annual contribution is capped at $3,650 per individual and $7,300 per family.
FSA: Employers may offer one of two options for unused funds—a 2.5-month grace period to use the money, or a $570 carryover allowance added to the next year’s plan. However, the Consolidated Appropriations Act (CAA) allows employers to offer participants a full-year grace period for 2020 and 2021 contributions.
HSA: All remaining funds in your HSA will roll over to the next plan year.
FSA: Your employer owns the account, and you may lose access to the account if you are fired or resign from your job.
HSA: The participant owns the account and is in charge of deposits and withdrawals.
The Bottom Line
Oftentimes, the perceived cost of LASIK is the only thing keeping someone from experiencing the vision they’ve always wanted without the hassle of glasses or contacts.
At nJoy Vision in Oklahoma City, we pride ourselves on offering our patients the most advanced technology at the best value. Our goal is to help everyone find a way to afford this life-changing procedure. When available, using an FSA or HSA to pay for or reduce the expenses tax-free is one of those solutions.
But even if you don’t have an FSA or HSA, we’ll help you find a way!
All you have to do is schedule a completely free, no-risk consultation. If laser vision correction is right for you, we’ll go over all the available payment and financing options. And on top of that, you can save $600 on LASIK through the end of 2021 with our Holidays of LASIK discount.