Are Medical IDs FSA or HSA Eligible?
A question we're frequently asked is: "Are medical IDs FSA or HSA eligible expenses?" Good news - the short answer is yes!
More than 300 million Americans have some kind of health insurance, but most programs don’t cover all medical expenses, and some programs barely cover the basics.
But there's good news for the many Americans living with chronic medical conditions. If you have an FSA or HSA account, a medical ID is a covered expense.
According to FSAStore.com, "Medical alert bracelets are eligible for reimbursement with a flexible spending account (FSA), health savings account (HSA), or a health reimbursement arrangement (HRA). Medical alert bracelets are not eligible with a dependent care flexible spending account (DCFSA) or a limited-purpose flexible spending account (LPFSA)."
Read more about how to use your health savings account to pay for your MedicAlert ID, and learn about the different types of health savings accounts.
How do I use FSA or HSA funds to purchase a MedicAlert ID?
Because medical alert bracelets are defined as an eligible expense for health savings accounts, you can purchase a MedicAlert ID and submit the receipt to your FSA or HSA plan administrator for reimbursement.
If you need a receipt, feel free to call our Member Services team for assistance. We’re available from 6am – 4:30 pm PT, Monday – Friday. You can also contact us here.
If you have questions about what expenses are reimbursable for your specific plan, check with your FSA or HSA administrator.
A list of qualified expenses is also published in the most current IRS Publication 502, Medical and Dental Expenses.
What is an FSA/HSA health care plan/account?
Flexible spending accounts (FSAs) and health savings accounts (HSAs) let you set aside pre-tax money, sometimes directly from your paycheck, to pay for eligible medical expenses.
Depending on the type of health insurance you have, you may be eligible for one of these types of accounts. The benefits are that you lower your tazes but allocating money to your health savings account, and when you have a medical expense you already have funds set aside to pay for it.
Health Savings Accounts (HSA)
More than 70 million Americans are enrolled in a high-deductible health plan (HDHP). While monthly premiums for HDHP’s are typically lower, the insured will pay more healthcare costs upfront before the insurance company will pay its share. For 2022, the IRS defines an HDHP as any plan with a deductible of $1,400 or more for an individual or $2,800 or more for a family.
Individuals with an HDHP can open an HSA on their own or through their employer to help pay for medical expenses. The employer health plan must be an HSA-eligible high-HDHP.
Flexible Savings Accounts (FSA)
Individuals who have any type of health plan through their employer can open an FSA to help pay for medical expenses that their health plan may not cover. This may include copayments, deductibles, some drugs, and other health care costs.
For both FSA and HSA accounts, contributions and distributions for qualified medical expenses are not subject to taxes.
What is an eligible FSA or HSA expense?
An eligible expense is a health care service, treatment, or item the IRS states can be paid for without taxes. The list of covered expenses is extensive and includes everything from acupuncture to x-rays.
Medical ID bracelets are an eligible expense, and most FSA and HSA plans will reimburse you for the costs of a MedicAlert ID.
HSAStore.com has a convenient list of the common products and services claimed for reimbursement on HSA and FSA plans
What are the differences between an FSA and HSA account?
There are a number of differences between FSA and HSA accounts. The most notable are in qualifications, ownership, contribution limits, rollover limits, and grace periods. The tax benefits for FSA and HSA accounts are basically the same, but HSA’s carry an additional requirement.
According to Forbes Advisor and United Healthcare, the key differences between FSA and HSA accounts include:
Qualifications
- FSA: You qualify to participate in an FSA if your employer sets up a plan on your behalf.
- HSA: You can set up an HSA independently or through your employer. Generally, you must have an HDHP (High Deductible Healthcare Plan) to qualify.
Account Owner
- FSA: Your FSA is owned by your employer, but it’s your money.
- HSA: Your HSA account is owned by you and it’s portable, which means, if you have an HSA with your employer and separate from your job, you can take your HSA funds with you.
Tax Benefits
- FSA: Contributions made to an FSA are tax-free, therefore amounts are not subject to payroll or income taxes. Distributions made for qualified medical expenses are not subject to taxes.
- HSA: Contributions made to an HSA are tax-free or tax-deductible. Distributions made for qualified medical expenses are not subject to taxes. If your HSA distribution is not used for qualified medical expenses, an additional tax of 20% will be assessed.
Contribution Limits
- FSA: For 2024, you can contribute up to $3,050. For married couples, both you and your spouse can each have your own FSA through your respective employers and both can contribute the maximum amount to each account, for a total of $6,100 per household.
- HSA: For 2024, you can contribute up to $3,650 for individuals or up to $7,300 for families. HSA limits include both employee and employer contributions. Over the age of 55, you can contribute up to an additional $1,000 at the end of the year.
Rollover Limits and Grace Periods
- FSA: The IRS limits the rollover to up to $640 per year. An extended period may allow you to use your FSA funds up to an additional 2.5 months after the end of the year.
- HSA: There is no limit to when you can use your HSA funds. Unspent funds transfer to the next year. You are allowed to roll over your HSA funds from one provider to another every 12 months
Visit MedicAlert IDs to select a medical ID that’s right for you!
Sources: Forbes Advisor; GoodRX Health; Healthcare.gov/FSA; Healthcare.gov/HDHP; IRS.gov; Lumity Inc.; National Library of Medicine (NLM)-National Center for Biotechnology Information (NCBI); United Healthcare; U.S. Census Bureau; Wisconsin Department of Employee Trust Funds.
