An estimated 103.5 million Americans use tax-advantaged accounts like health savings accounts (HSAs) and flexible spending accounts (FSAs). Both of these options help you take control of your healthcare expenses while maximizing your tax savings. While there are some similarities in these accounts, they do differ in a few ways, including who can use them, who owns them, how much money you can put in, what happens to any unused funds and their rules for withdrawing money.

You may think it dull or confusing to think about tax-saving opportunities, but becoming familiar with HSA and FSA benefits can keep more money in your wallet.

HSA and FSA benefits can make healthcare more accessible and affordable, so keep reading to learn about how to make the most of it, as well as explore the wide range of eligible products and services that you can purchase with these accounts — just over at your local Rite Aid.*

Eligible Expenses

You can use the funds in your HSA or FSA to pay for a wide range of eligible healthcare expenses, including doctor visits, prescriptions and medical supplies. The IRS provides a detailed guide that you can use to stay informed about eligible expenses, which can change over time. Your employer might also offer a list of expenses that are covered or reimbursable using your HSA or FSA funds. Understanding what counts as an eligible expense is vital to making informed purchasing decisions.

FSA and HSA benefits often include a debit card that you can use to pay for eligible expenses. You may also need to provide itemized receipts or other documentation.

Eligible expenses commonly include over-the-counter (OTC) medications and products like first aid kits, prescription medications, medical or dental services and more.

OTC Products

In 2020, the passing of the CARES Act expanded the list of eligible expenses to include OTC products without needing a prescription, as well as menstrual care products. Being able to conveniently purchase these products using FSA or HSA benefits has been a game-changer for many Americans.

You can now purchase many common OTC health and personal care items with HSA or FSA funds. If you find yourself with leftover FSA funds at the end of the year, it may be wise to stock up on the OTC products you use most. In fact, more than 3,000 items are available at the Rite Aid FSA & HSA Shop, such as:

• Pain and fever relievers, like Tylenol (acetaminophen)
• Cold and cough medicines, such as Mucinex
• OTC hearing aids and hearing aid batteries
• Personal protective equipment, such as face masks and gloves as well as hand sanitizer
• First aid supplies, like bandages and first aid kits
• Family planning products, from condoms to pregnancy tests
• Diabetes products, such as a blood glucose monitor and test strips
• Eye care products, such as contact lens solution

Your Rite Aid pharmacist can help you determine which OTC products are best for you and your family.

Prescription Medications

One of the most valuable FSA and HSA benefits is access to prescription medications and vaccines. Both HSA and FSA funds can be used to pay for prescription copays, making it easier for individuals to manage chronic health conditions.

Setting aside money as part of your HSA or FSA benefit can provide peace of mind, knowing you'll have the funds available if you or your family members unexpectedly need prescription drugs. You can even use FSA and HSA funds to pay for prescriptions and immunizations that are not covered by your insurance plan.

Vision and Dental Expenses

HSAs and FSAs can be valuable tools for managing vision and dental expenses. Qualifying expenses include eyeglasses, contact lenses and routine exams. You can also use eligible funds toward dental treatments such as cavity repair, root canals and other necessary dental procedures.

For more costly procedures involving orthodontics or vision correction surgery, having an HSA or FSA can make these treatments more affordable. Having regular checkups for vision and dental health is critical to detect and treat problems early before they turn into complex issues. With HSA and FSA funds, you can budget pre-tax dollars toward any necessary vision or dental treatments without having to use your after-tax income.

Key Account Differences to Note

As stated, there are some basic differences between these two account types — and it's important to recognize them as you navigate your healthcare journey. They include the following:

• Who can use them? FSAs are typically offered by employers as part of a medical benefits package. Most employees can participate in an FSA, regardless of the type of health insurance they have. In contrast, HSAs are only available to people enrolled in a high-deductible health plan, or HDHP. To contribute to an HSA, you cannot have other non-HDHP health coverage, such as Medicare.

• Who owns them? Employers typically manage FSAs. Employees contribute money to their FSA, but they don't own the account. Also, the FSA funds may not move with the individual if they change jobs. HSAs, on the other hand, are owned by the individual. HSA and FSA contributions can be made by the individual and/or their employer. HSAs are portable, meaning the funds stay with you even if you change employers, retire or leave the workforce.

• What happens to unused funds? HSAs are designed for long-term savings. Money that's left in an HSA at the end of the year doesn't disappear; it rolls over from year to year and can be invested. This investment can grow tax-free, allowing individuals to save for future medical expenses. Conversely, FSA funds typically have a "use it or lose it" rule, meaning any unused funds are forfeited at the end of the plan year (although some employers offer a grace period or allow you to roll over a small amount).

Keep in mind that HSA/FSA requirements and rules may vary. To learn the details and limits of your plan, reach out to your employer or a tax professional.

Taking Advantage of Spending Account Benefits

Maximizing the benefits of your HSA or FSA account starts with a clear understanding of eligible expenses. You can make the most of FSA and HSA benefits by learning about the wide range of eligible products and services. HSAs and FSAs can provide a financial cushion for the rising cost of healthcare and bring peace of mind in the event of a medical emergency. Whether you're facing a sudden illness, surgery or significant health crisis, these accounts can provide a safety net.

With its extensive selection of eligible healthcare products, Rite Aid offers a convenient way to use FSA funds before you lose them, helping you prioritize your health while saving money and time.

*Selection may vary by store.

Written by: Patricia Weiser, PharmD

These articles are intended for informational purposes only and are not a substitute for professional medical advice, diagnosis, or treatment and are not intended to treat or cure any disease. Never disregard professional medical advice or delay in seeking it because of something you have read in these articles. Advances in medicine may cause this information to become outdated, invalid, or subject to debate. Professional opinions and interpretations of scientific literature may vary. Consult your healthcare professional before making changes to your diet, exercise or medication regimen.