Learning Hub
Everything you need to know about FSA and HSA accounts, eligibility rules, and maximizing your healthcare savings
Official IRS Resources
FSA vs HSA: What's the Difference?
| Feature | FSA | HSA |
|---|---|---|
| Ownership | Employer-owned | Employee-owned |
| Rollover | Limited ($640 in 2025) or use-it-or-lose-it | Unlimited rollover |
| Portability | Lose when changing jobs | Stays with you |
| Investment | No investment options | Can be invested |
| Insurance Requirement | Any health plan | Must have HDHP |
Letter of Medical Necessity (LMN)
What is an LMN?
A Letter of Medical Necessity (LMN) is a document from your healthcare provider that explains why a particular treatment, service, or product is medically necessary for your condition. Some items require an LMN for FSA/HSA reimbursement eligibility.
Learn More About LMN →Popular Eligible Categories
First Aid & Medical Supplies
Bandages, gauze, antiseptics, first aid kits
Vision Care
Glasses, contacts, eye exams, LASIK
Dental Care
Cleanings, fillings, dentures, orthodontics
Medications
Prescriptions and OTC medications
Medical Devices
Blood pressure monitors, thermometers, diabetic supplies
Mobility Aids
Wheelchairs, crutches, walkers, canes
Frequently Asked Questions
What is an FSA (Flexible Spending Account)?
An FSA is a special account you put money into that you use to pay for certain out-of-pocket health care costs. You don't pay taxes on this money, which means you save an amount equal to the taxes you would have paid on the money you set aside.
What is an HSA (Health Savings Account)?
An HSA is a tax-advantaged medical savings account available to taxpayers enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit. Unlike an FSA, HSA funds roll over and accumulate year to year if not spent.
What is a Letter of Medical Necessity (LMN)?
A Letter of Medical Necessity is a document from your healthcare provider stating that a specific treatment, service, or product is medically necessary for your health condition. Some FSA/HSA items require an LMN for reimbursement eligibility.
Can FSA/HSA be used for over-the-counter medications?
Yes, as of 2020, over-the-counter medications and drugs are eligible for FSA and HSA reimbursement without a prescription. This includes pain relievers, allergy medications, cold medicine, and more.
Maximizing Your FSA/HSA
- 1Always keep receipts and documentation for your purchases
- 2Check with your plan administrator before making large purchases
- 3Be aware of contribution limits and deadlines
- 4Understand your plan's specific rules regarding rollovers and grace periods
- 5Consider using an FSA/HSA for predictable medical expenses
- 6Keep track of your FSA balance to avoid losing funds at year-end
- 7For HSA, consider investing funds you don't need immediately