How to save with an HSA or FSA—and which is best for you

If you’re ready to level up your physical and financial health, consider a Health Savings Account (HSA) or Flexible Spending Account (FSA).

These tax-advantaged savings accounts help you save on funds you use for health care expenses—whether you’re staying on top of routine care or get unexpectedly hit with a medical emergency. They may even be able to help you save on gym memberships, fitness classes and medical massages!

Here’s everything you need to know about opening, unlocking, and getting the most out of an HSA or FSA.

What are Health Savings and Flexible Spending accounts?

Health Savings and Flexible Spending accounts let you save pre-tax funds to pay for healthcare expenses. They reduce your taxable income, meaning you pay less in taxes and have more to spend on your health and longevity!

If you’re shopping around for new insurance plans this time of year, keep an eye on those marked as HSA-eligible. These plans usually have low monthly premiums—but high deductibles and high out-of-pocket maximums. More specifically, the insurer must detail the amount you need to spend out-of-pocket before they start to cover costs.

What’s the difference between an HSA and an FSA?

With both accounts, the funds you deposit are not subject to income tax. Neither are the funds you use from them to pay for medical needs.

Your savings are determined by the percentage you would have paid towards your taxes. So you’ll save the same amount on your medical care with both accounts.

Otherwise, here are a few notable differences:

Eligibility:

• HSA: HSAs are only available to those with a high-deductible health insurance plan (HDHP). For 2025, individual plans must have a deductible of at least $1,650 and family plans at least $3,300. The maximum you can pay out of pocket annually is $8,300 individually or $16,600 as a family. You can open an HSA if you get insurance through a Marketplace plan.
• FSA: FSAs are only obtainable if an employer offers one as an additional benefit to an established work health plan. You cannot access one if you get insurance through a Marketplace plan.

Account operations:

• HSA: You can open an HSA with any financial institution (like a bank or credit union) that offers one. That entity becomes your HSA administrator, and you’ll go through them to manage your funds or file eligible expenses.
• FSA: Employers arrange FSAs. You may have to go through your HR department to manage your funds or filings.

Maximum contributions:

• HSA: In 2025, individuals can deposit as much as $4,300 into their HSA, and families can deposit up to $8,550.
• FSA: In 2025, individuals can deposit $3,300 to their FSA. Married partners can each contribute $3,300 to their FSA. Employers may also match a portion of their employees’ deposited funds as a health incentive.  

Unused funds:

• HSA: Unused funds remain in your account indefinitely. Some financial institutions offer interest rates, which can increase their value.
• FSA: You forfeit unused funds to your employer at the year’s end. They can opt to either let you retain a portion for the following year or give you an extended amount of time to use them. In 2025, employers can roll over up to $660 of unused funds (20% of the FSA limit).

Tax filing:

• HSA: You’ll need to file Form 8889 with your annual tax return, using information your HSA administrator will send you on Form 1099-SA.
• FSA: If you only use FSA funds to pay for personal medical expenses (meaning you don’t use any to pay for the care of a dependent), you don’t have to file any annual tax forms.

How do you open an HSA or FSA?

You can only open an FSA through your employer. So ask your manager or HR department if they offer them, how to set one up, and what benefits or restrictions they include. (Some employers will match a portion of your deposit!)

Here are a few tips on how to open an HSA:

1. Prioritize your needs: Financial institutions offer varying fees and interest rates. Some offer debit-like HSA cards. Some have robust online portals where you can file to get reimbursed for expenses incurred. Others are clunkier. And processing times vary.
2. Ask your insurer: Your health insurer may partner with an institution to offer special HSA rates or promotions. So may the bank you already use. Explore if you can take advantage of these.
3. Do online research: Shop around and compare the maintenance fees, interest rates, online processing and other priority points that matter to you.

What can you buy with an HSA or FSA?

You can use your HSA or FSA funds for services and items that prevent or help treat an injury, disability or medical condition.

Common purchases include health insurance premiums, doctor visits, lab fees, surgeries, eye or dental exams and other routine care costs. (Note: you can’t use FSA funds to pay for your insurance premiums.)

The IRS creates FSA and HSA withdrawal rules that clarify further qualifying expenses.

Other qualifying expenses include:

• Reproductive care (birth control, abortion, etc.)
• Pregnancy care (tests, fertility, breast pumps, etc.)
• Acupuncture and chiropractic care for injury or illness.
• Addiction services (AA, in-patient treatment, etc.)
• Weight loss treatments (nutritional counseling, etc.)
• Disability accommodations (home updates, mobility devices, etc.)

Get more details at What can you buy with HSA funds? by Dr. B.

When do you need a Letter of Medical Necessity?

You need a Letter of Medical Necessity (or medical justification letter) for items or services people can use for their general health.

For example, a deep-tissue massage is not medically necessary for someone in good health. But if it eases symptoms for someone with chronic migraines, the cost of a massage may qualify as a medical expense.

For such patients, a provider can write a Letter of Medical Necessity clarifying the connection between the item or service and the medical condition it helps prevent or treat. The patient then files this letter with receipts for related purchases to their administrator and gets the amount reimbursed from their HSA or FSA account.

Other expenses that require justification include prescription treatments for people with conditions like dandruff, air filters or purifiers for people with asthma, or fitness classes for people with high blood pressure or high BMI.

To learn more about this process, read What is a Letter of Medical Necessity? by Dr. B.

How Dr. B can help you reimburse from an HSA/FSA

Our mission at Dr. B is to support your physical and financial health. To us, that means helping to make the process of FSA or HSA reimbursement less of a hassle.

If exercise or a medical massage helps prevent or treat your medical condition, you don’t need to schedule an in-office appointment with your doctor. Instead, we may be able to help you get a Letter of Medical Necessity online with a $15 consultation!

Here’s how it works:

1. Take an online consultation for rehabilitation therapy (massage) or to save on fitness fees.
2. If you qualify, a licensed provider will email a Letter of Medical Necessity within 1 day. (But often within a few hours!)
3. Pay for your item or service, and save your receipts!
4. File your receipts and letter with your HSA or FSA administrator and wait for reimbursement.

Learn more about Dr. B’s HSA/FSA savings, or start a consultation today!

Sources:

Health Insurance Marketplace. (2023). What’s a health savings account?

Healthcare.gov. Health Savings Account (HSA).

Internal Revenue Service Department of the Treasury. (2023). Publication 502: Medical and dental expenses.

Internal Revenue Service. (2023). Publication 969 (2023). Health savings accounts and other tax-favored health plans.