Flex Guide to HSA and FSAs

At Flex, we know that HSA/FSA can be confusing and we’re here to help answer all your questions so you can use these accounts with confidence!

Don’t see your question answered below? Email us at support@withflex.com and we’d be happy to help. Don’t be shy! If you have the question, it’s likely many others do as well.

What are HSAs and FSAs?

Health savings accounts (HSAs) and flexible spending accounts (FSAs)* are tax advantaged accounts that can be used for health related purchases.

There are two key differences between HSAs and FSAs that are helpful to keep in mind when deciding if they’re right for you.

  1. Ownership -

    • FSA accounts are owned by your employer whereas HSA accounts are owned by you, the individual. This is an important distinction as it means that FSA funds are typically use it or lose it. If you don’t spend the money in your FSA by the end of the year, you lose access to it and it goes back to your employer. A similar situation can happen when you change jobs. You may find yourself with a limited amount of time to spend the money in your FSA. With an HSA, the money in the account is yours and it stays with you through job changes and year over year. You can also open an HSA yourself which makes them a great option for people who are self employed.
  2. Ability to invest

    • Instead of spending money on current healthcare expenditures, you can choose to invest your HSA contribution and let it grow tax-free over time. This is a great option if you don’t need or want the money for current expenses. You do not have the option to invest the money in an FSA.

What does tax-advantaged mean?

Tax advantaged means that these accounts help you pay less in taxes. There are three ways that HSAs and FSAs help you save on taxes. Over time, this really adds up!

Pre-tax contributions: Money that you decide to put into your HSA or FSA is taken out of your paycheck before taxes are applied. This reduces your taxable income for the year, meaning you'll pay less in taxes.

Tax-free growth: If you put money into an HSA, invest it, and over time that money grows, you won’t be taxed on it. This is similar to other tax-advantaged accounts like a Roth 401K. This does not apply to FSAs as you are not able to invest FSA funds.

Tax-free withdrawals: When you use funds from your HSA or FSA to pay for qualified medical expenses, those withdrawals are tax-free. You won't pay income tax on the money you take out as long as it's used for eligible expenses.

This sounds great! How do I open an HSA or FSA account?


  • FSAs are typically established through employers. To get an FSA, your employer must offer it as part of their benefits package.
  • During your employer's open enrollment period (typically once a year), you can elect to participate in the FSA. You'll decide how much money you want to contribute for the year, up to the annual limit.
  • The amount you elect to contribute is divided by the number of pay periods in the year, and that amount is deducted pre-tax from each paycheck. Some companies give you the ability to front load contributions.


  • First, confirm you're eligible for an HSA. To open and contribute to an HSA, you must be enrolled in a High Deductible Health Plan (HDHP). You shouldn't be enrolled in any other non-HDHP health coverage, be claimed as a dependent on someone else's tax return, or be enrolled in Medicare. If you’re not sure, you can ask your health insurer!
  • Once you know you’re eligible, you can open an HSA through many financial institutions like banks, credit unions, or insurance companies. Some employers also offer HSAs as part of their benefits package.
  • Once your account is open, you can start making contributions up to the annual limit.

Some employers will contribute money to the FSA or HSA accounts of their employers each year. Check with your employer to confirm - this is free money for you to spend on health expenses!

How much can I contribute to my FSA or HSA in 2023?

  • FSA (Flexible Spending Account): The limit is $3,050 per year per employer. If you're married, your spouse can also contribute up to $3,050 in an FSA with their employer.

  • HSA (Health Savings Account): For self-only coverage, the limit is $3,850. For family coverage, the limit is $7,750. Additionally, if you are 55 or older, you can make a catch-up contribution of an extra $1,000 to your HSA.

How do I use the money in these accounts?

  • It’s common practice for HSA and FSA providers to send you a debit card that you can use to purchase eligible items. Both FSAs and HSAs are acceptable online and in physical stores.
  • You can also pay for health expenses with your regular credit or debit card, collect receipts, and submit to your HSA or FSA provider to be reimbursed.

What can I spend my HSA or FSA money on? What qualifies as a health expense?

  • Traditionally, health expenses are limited to spending at healthcare facilities (think doctor’s office, dentist office etc) or on a specific list of items, usually available at a pharmacy like CVS or Walgreens.
  • Flex works with wellness partners to enable you to spend your HSA/FSA money with them as well. Our partners include sleep, fitness, and meditation apps, nutrition programs, in person gyms, wearables and even medical tourism! Reach out to support@withflex.com if you’re interested in learning more!

Helpful Resources