Health savings accounts are an important part of how you can save money and lower your healthcare spend. Here’s the scoop on health savings accounts.

Flexible Spending Account (FSA)
Put money in your FSA. Use your FSA to pay for eligible expenses. (Think: Rx, Lasik eye surgery, allergy testing.) Simple, right? Even better: your FSA money is tax-free, so you save more in an FSA than if you put it aside in a taxable savings account. You can contribute up to $2,650 per year in 2018, but if you don’t use your FSA funds, they go away.* (Parents, you can set up a dependent care FSA for your kids, too.)

*Your employer may allow you to roll over up to $500 into the next year. Check with them about specifics.

Health Savings Account (HSA)
If you’re on a high deductible health plan, open an HSA. (High deductible = a deductible over $1,350.) Put money into your HSA, up to $3,450, or $6,900 for a family in 2018. Contributions you make to the account are tax-deductible (score!), and the account grows tax-free (double score!). Use your HSA for eligible expenses. Your HSA money is always yours. Unlike an FSA, all funds roll over. (It’s a smart strategy to grow your HSA. After you turn 65, you can withdraw HSA funds for any reason –– though you’ll then pay taxes on nonqualified expenses. It’s a savings account for now, and for later.) If your employer doesn’t offer an HSA, you can open your own at a bank or financial institution.

If you have both an HSA and an FSA, your FSA becomes limited purpose, so you can use it for dental and vision only.

Health Reimbursement Arrangement (HRA)
An HRA is funded and owned by your employer. They reimburse you for eligible expenses up to a certain dollar amount. (Nice!) Ask HR for the specifics about your HRA, like which expenses are eligible.