Don't let the legal jargon stop you from saving money. We've decoded the most important FSA, HSA, and HRA terms for the 2026 tax year.
The total amount of money you choose to contribute to your FSA or HSA during the Open Enrollment period. Once set, this amount is usually fixed for the entire plan year unless you experience a Qualifying Life Event.
Calculate Your Election →A formal request to your benefits administrator to reconsider a denied claim. Appeals usually require additional documentation or a Letter of Medical Necessity to prove the expense was for a medical purpose.
Generate Appeal Letter →The person designated to receive the funds in your HSA in the event of your death. If your spouse is the beneficiary, the account remains an HSA. If anyone else is the beneficiary, the account ceases to be an HSA and the fair market value becomes taxable to them.
A provision that allows employees to move a portion of their unused FSA funds into the next plan year. For 2026, the IRS limit for carryover is $660. Not all employers offer this; some use a "Grace Period" instead.
A reimbursement plan maintained by an employer that allows employees to contribute a portion of their gross income to designated benefit accounts (like FSA or DCFSA) before taxes are calculated.
See Employer Savings Math →A federal law that may allow you to temporarily keep health coverage after your employment ends. You can often use HSA funds to pay for COBRA premiums tax-free, which is a rare exception to the "no premiums" rule.
The amount you pay for covered health care services before your insurance plan starts to pay. High Deductible Health Plans (HDHPs) are required to have an HSA.
A pre-tax account used to pay for eligible care expenses for children under 13 or disabled adults. Common expenses include daycare, preschool, and summer day camps.
Read DCFSA Rules →The criteria that determine if an individual or an expense qualifies for a tax benefit. HSA eligibility requires being covered by a qualified HDHP, whereas FSA eligibility is typically determined by employer plan design.
Check Item Eligibility →The Federal Insurance Contributions Act tax, which funds Social Security and Medicare. When you contribute to an FSA, you avoid the 7.65% FICA tax, providing an immediate "bonus" in every paycheck.
FICA Savings Tool →An optional 2.5-month extension (usually until March 15th) provided by some employers to spend the remaining balance of an FSA from the previous year. You cannot have both a Grace Period and a Carryover.
A health insurance plan with lower premiums and higher deductibles than a traditional PPO. To be eligible for an HSA, your plan must be a "qualified" HDHP as defined by the IRS.
Find Your Plan Match →A tax-advantaged savings account available to people who have an HDHP. Funds roll over indefinitely and can be invested in the stock market for long-term growth.
Simulate HSA Growth →The definitive IRS guide that lists what medical and dental expenses can be deducted on a tax return or reimbursed via an FSA/HSA. Our tools are built based on this regulation.
The Verified 502 List →A document written by a doctor that explains why a specific treatment or product (that is normally considered "dual-purpose" or "wellness") is needed to treat a medical condition.
Generate LMN PDF →A special type of FSA that works alongside an HSA. It can only be used for eligible Dental and Vision expenses, allowing you to save your HSA funds for medical costs or investments.
A term used to describe healthcare services or supplies needed to prevent, diagnose, or treat an illness, injury, condition, disease, or its symptoms. General health and wellness items are usually excluded from this definition.
The annual period during which you can choose or change your employer-provided benefits, including your FSA and HSA contribution amounts. Outside of this window, you generally cannot change your elections.
The 12-month period during which your benefits plan is active. For most employers, this aligns with the calendar year (Jan 1 – Dec 31), but some companies use a "Fiscal Year" (e.g., July 1 – June 30).
A change in your situation—like getting married, having a baby, or losing health coverage—that can make you eligible for a Special Enrollment Period, allowing you to change your benefit elections mid-year.
A fixed period of time after the plan year ends (usually 60-90 days) during which you can still submit claims for expenses that were incurred during the previous year.
Functionally identical to a Letter of Medical Necessity (LMN). This is the specific terminology used by certain administrators (like Optum Bank or HealthEquity) for the doctor's note required to substantiate dual-purpose claims.
Create Your SOMN →The process of providing proof (usually in the form of an itemized receipt) to your plan administrator to verify that a transaction made with your FSA/HSA card was for an eligible medical expense.
Track Your Receipts →The IRS regulation stating that any funds remaining in an FSA at the end of the plan year (and outside of any carryover/grace period) are forfeited to the employer.
Spend Down Your Balance →