What HSA and FSA Account Managers Do
An HSA (Health Savings Account) or FSA (Flexible Spending Account) account manager is a company that holds and administers your health savings money on behalf of your employer. These organizations handle the day-to-day operations of your account, including receiving deposits, processing claims, managing your debit card (if you have one), and keeping records of your spending.
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Your account manager is not your employer and is not the government. Instead, they are third-party financial institutions hired by your employer to manage these tax-advantaged accounts. Common account managers include companies like Fidelity, Conduent, PayFlex, HealthEquity, and WageWorks. Your employer chooses which company manages your account, so you typically don't select your account manager directly.
The main job of your account manager is to ensure that money in your HSA or FSA is spent only on qualified medical expenses as defined by the IRS. This means they verify purchases, maintain records, handle reimbursements, and provide you with statements and documentation. They also manage the rules around how much money you can set aside each year and what happens to unused funds.
Understanding your account manager's role matters because they are your main point of contact for questions about your account. They can tell you your current balance, explain which expenses qualify for reimbursement, help you submit claims, and provide year-end statements for tax purposes. Knowing what services they offer can help you use your account more effectively.
Practical Takeaway: Identify which company manages your HSA or FSA by checking your benefits paperwork or asking your employer's human resources department. Visit their website to explore what services they provide and create an online account to monitor your balance.
How HSA Accounts Work With Account Managers
An HSA is a savings account designed for people with high-deductible health insurance plans. According to the IRS, in 2024 a high-deductible plan for an individual has a minimum deductible of $1,600, and for a family the minimum is $3,200. If you have this type of plan, you may open an HSA and contribute pre-tax money to it each year. Your account manager holds this money and keeps it separate from your regular checking account.
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The money you put into an HSA belongs to you and stays in your account even if you change jobs or health insurance plans. This is one of the key differences between HSAs and FSAs. Your account manager helps you understand this portability by providing information about how to access your account after you leave your job and how to transfer your balance if you move to a new employer.
Each year, the IRS sets limits on how much you can contribute to an HSA. For 2024, the limit is $4,150 for individual coverage and $8,300 for family coverage. Your account manager tracks your contributions throughout the year and alerts you if you are approaching the limit. They also help you understand what happens if you contribute more than the legal limit—you may face taxes and penalties on the excess amount.
Your account manager provides you with a debit card or reimbursement process to spend your HSA money on qualified medical expenses. Qualified expenses include doctor visits, prescription medications, dental work, vision care, and many other health-related costs. However, expenses like cosmetic surgery, gym memberships, or over-the-counter vitamins (in most cases) do not count as qualified expenses. Your account manager maintains lists of what does and does not count.
One important feature of HSAs is that any money you don't spend stays in your account and can be used in future years. Unlike FSAs, there is no "use it or lose it" rule with HSAs. This means your account manager helps you track long-term savings and shows you how much money you have accumulated over time. Many people use their HSAs as retirement savings tools because after age 65, you can withdraw money for any reason without penalty (though you'll pay income tax on non-medical withdrawals).
Practical Takeaway: Log into your HSA account manager's website regularly to review your balance, check contribution limits, and plan which qualified expenses you want to pay from your account this year. Keep records of all medical expenses you pay out-of-pocket in case you want to reimburse yourself later.
How FSA Accounts Work With Account Managers
An FSA is a different type of health savings account that works somewhat differently from an HSA. Unlike an HSA, you do not need a high-deductible health insurance plan to open an FSA. However, FSAs are "use it or lose it" accounts, meaning any money you don't spend by the end of the plan year is forfeited—your account manager will not return it to you. This is an important distinction that affects how you should approach FSA planning.
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Each year, you decide how much money to set aside in your FSA during your employer's open enrollment period. For 2024, the maximum you can contribute to a dependent care FSA is $5,000, and for a medical/general purpose FSA, the limit is also $3,300. Your account manager tracks these elections and ensures your contributions don't exceed the legal limit. Because these funds come directly from your paycheck before taxes are taken out, putting money in an FSA reduces your taxable income for the year.
Your account manager processes claims for FSA reimbursement. When you have a qualified medical expense, you can either use your FSA debit card at the time of purchase, or you can pay out-of-pocket and then submit a claim to your account manager for reimbursement. The account manager reviews your claim to verify the expense is qualified and then deposits the money into your bank account or sends you a check.
One challenge with FSAs is predicting how much money you will spend on medical expenses during the year. If you set aside too much money and don't use it all, you lose the unused amount. Your account manager can help by providing estimates of what types of expenses you might have and showing you past spending patterns if you've had an FSA before. However, you bear the responsibility of making an accurate estimate.
There are limited exceptions to the "use it or lose it" rule. Some employers offer a "grace period" of up to 2.5 months after the plan year ends, during which you can spend remaining FSA funds. Other employers allow you to carry over up to $610 of unused FSA money to the next year (for 2024). Your account manager will inform you whether your employer's plan includes these options. These details are critical for planning your FSA contributions.
Practical Takeaway: Before each open enrollment period, review your medical expenses from the past year and estimate what you might spend in the coming year. Be conservative in your estimate to avoid forfeiting unused funds. Ask your account manager whether your plan has a grace period or carryover option, as this affects how much you should contribute.
Working With Your Account Manager: Key Services and How to Use Them
Most HSA and FSA account managers offer several services to help you manage your account. Understanding what these services are can help you get the most out of your health savings account. Nearly all account managers provide an online portal where you can log in, view your account balance, check your transaction history, and submit claims for reimbursement. This portal is usually available 24/7, so you can access information whenever you need it.
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Many account managers also offer mobile phone applications that let you manage your account from your smartphone. These apps typically allow you to check your balance, submit photos of receipts for claims, find nearby pharmacies or medical providers, and receive notifications about your account activity. Using these tools can make managing your account faster and more convenient.
Account managers maintain customer service teams you can contact by phone, email, or online chat if you have questions. Common questions include: "Does this expense count as qualified?", "Why was my claim denied?", "What is my current balance?", and "How do I set up my debit card?" Having a clear question in mind before you contact customer service will help you get answers more quickly. Some account managers also publish FAQs and knowledge bases on their websites that answer common questions.
Your account manager provides statements that show your contributions, spending, claims processed, and current balance. These statements are important for record-keeping and tax purposes. You should review your statements regularly to catch any errors or unauthorized transactions. If you spot a problem, contact your account manager right away to report it.
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