If you work for a medium- to large-size employer, chances are you have the option to set up a health savings account (HSA), also known as a flexible spending account (FSA) or a cafeteria plan.

Setting up such an account allows you to pay for qualified medical expenses with your pre-tax dollars. During open enrollment, you estimate how much money to set aside for the plan year based on your anticipated spending. The cap now is $2,500 per job per individual.

Once the plan year begins, the entire amount is available for your use. Dividing that amount by the number of paychecks you receive over the year, a set amount is deducted from each paycheck.

You submit your qualified receipts and get reimbursed. In some cases, you may be given a flex card to use for these expenses.

Often you lose any funds not spent by the end of the year, but in some cases there’s a grace period for spending it down, or $500 may be allowed to roll over into the next plan year. The IRS changes the rules from time to time. I found some information in this article in Forbes.

You can usually use your HSA or FSA to pay for massage, but check with your particular plan. Continue reading →