Speaker 1: Episode four twenty eight FSA versus HSA, Which is right
Speaker 1: for you?
Speaker 2: Welcome to the Frugal Friends podcast, where you'll learn to
Speaker 2: save money, embrace simplicity, and live a life here your
Speaker 2: hosts Jen and Jill.
Speaker 1: Welcome to the Frugal Friends podcast. My name is Jen,
Speaker 1: my name is Jill, and today we are talking about
Speaker 1: flexible spending accounts and health savings accounts. One is the
Speaker 1: darling of the personal finance world and the other is
Speaker 1: her outcast step cousin. But we are going to shine
Speaker 1: a light on this ugly duckling and tell you one
Speaker 1: may be right for you and it may not be
Speaker 1: the one you think.
Speaker 3: Wow, spill the tea. That was a salaciousness.
Speaker 1: I know, I love I just I hate it when
Speaker 1: you find something good and you say it's the best
Speaker 1: for everyone, but like, you don't know me. You don't
Speaker 1: know what's best for me. Only I know what's best
Speaker 1: for me. And that is our mission with Frugal Friends
Speaker 1: is find what's gonna help you find what's best for you.
Speaker 1: Don't let somebody else tell you what's best for you,
Speaker 1: even if it's something that is really good.
Speaker 3: Love that. But first, this episode is brought to You
Speaker 3: by Eenie Meani miney Mo. Great for selecting where to
Speaker 3: go to dinner who's going to pay the bill? But
Speaker 3: not the method for ensuring your retirement accounts are intact.
Speaker 3: If your approach to retirement accounts is feeling more like
Speaker 3: being out there on the playground waving your finger around
Speaker 3: calling out nursery rhymes, uncertain of will where you'll land financially,
Speaker 3: at least check out capitalized to make sure you don't
Speaker 3: have any rogue four oh one k's you forgot to
Speaker 3: roll over. They'll find so capitalized, they'll find any old plans,
Speaker 3: help you roll it over into an IRA of your choosing,
Speaker 3: and they'll do it for free. Frugal Friends podcast dot
Speaker 3: com slash capitalize. Don't any meanie miney mow this thing.
Speaker 3: Do it for real? But I mean also open a
Speaker 3: roth IRA or traditional IRA, or just open a four
Speaker 3: oh one k with You're giving them too many action
Speaker 3: stuff there. I know I not, but do this do
Speaker 3: they go Friends podcast dot com slash capitalize. They will
Speaker 3: help you find any potential four A one k's that
Speaker 3: you may have forgotten about.
Speaker 1: Or four O three b's, any employer plan they can
Speaker 1: they can.
Speaker 3: Find and roll it over into an IRA of your choosing.
Speaker 1: All right, so let's talk about health baby. If you
Speaker 1: are looking to think about health insurance before open enrollment starts, uh,
Speaker 1: then we have a couple episodes for you. Episode two
Speaker 1: fifty four how to save money on health insurance. So
Speaker 1: this is open enrollment explained with our friend Eileen Doherty,
Speaker 1: she is a health insurance expert. And then episode three
Speaker 1: point fifty eight are experiences with healthcare sharing, so you'll
Speaker 1: learn why Jill and I both have health care sharing
Speaker 1: plans and we talk about the positives and the negatives
Speaker 1: in that one. Jill has more negatives than I do.
Speaker 3: But I was feeling salty.
Speaker 1: Yeah I know, and I went through a full pregnancy
Speaker 1: and delivery and C section with my healthcare sharing plan
Speaker 1: and had great things to say. So we have both
Speaker 1: used our healthcare sharing plans. We don't just have them
Speaker 1: because they're less expensive, we have experience with them. So
Speaker 1: episode three point fifty eight is another one. But today
Speaker 1: we are talking specifically about fessays and hssays because this
Speaker 1: is an important decider when you are choosing health insurance.
Speaker 1: These can impact your decision.
Speaker 3: So this article comes from the wall Street Journal, and
Speaker 3: it is titled FSA versus HSA, what's the difference and
Speaker 3: how to pick the right account for you. So we're
Speaker 3: just going to go through essentially the whole thing. And yeah,
Speaker 3: so it starts off with talking about fssays.
Speaker 1: Yeah, so let's first define what's the difference between the two.
Speaker 1: So FSA is flexible spending account. Spending is the keyword there.
Speaker 1: A Health savings account HSA is keyword savings. So you
Speaker 1: want to do your best to predict in this upcoming year,
Speaker 1: am I going to be doing more spending or saving
Speaker 1: on my healthcare? And that can influence for both. You
Speaker 1: are putting money into it. It's not just free money.
Speaker 1: You are putting in money to these and they will
Speaker 1: often have a contribution limit. You're contributing pre tax dollars,
Speaker 1: so anything that's tax advantage is going to have a limit.
Speaker 1: So for twenty twenty four, the contribution limit for an
Speaker 1: FSSAY is thirty two hundred. Those limits are adjusted annually
Speaker 1: and then for an HSA you've got forty one fifty
Speaker 1: four and fifty for eligible workers, eighty three hundred for
Speaker 1: a family. So these are accounts. Both are accounts you're
Speaker 1: putting money into one is with the intention of spending
Speaker 1: it in a calendar year. Because with an FSA, the
Speaker 1: big reason that people in the personal finance community don't
Speaker 1: like fssays is because they don't like spending money, but
Speaker 1: not us here, we love spending money. So if you
Speaker 1: foresee yourself spending money in on health in the calendar year,
Speaker 1: and we'll kind of go through scenarios later on how
Speaker 1: you can determine that FSA could be right for you
Speaker 1: if you don't foresee yourself spending on anything health related, you,
Speaker 1: your kids, your partner HSA.
Speaker 3: Yeah, so they describe that an FSA can go towards prescriptions,
Speaker 3: over the counter medications, medical supplies, equipment that could include
Speaker 3: diabetic test strips, pregnancy tests, period supplies, blood pressure monitors, eyeglasses.
Speaker 3: So there are a lot of things, even outside of
Speaker 3: just a doctor's visit, that you could use an FSA on.
Speaker 3: Then we moved to an HSA, as you describe gen
Speaker 3: a health savings account. So it's an account where you
Speaker 3: can contribute pre tax dollars in order to pay for
Speaker 3: qualified health expenses. So there's also an annual contribution maximum
Speaker 3: on this, similar to an FSA, but it is. It
Speaker 3: can be as high as forty one point fifty for
Speaker 3: eligible workers or eighty three hundred dollars for a family.
Speaker 3: So that certainly is going to give you greater flexibility
Speaker 3: in how you eventually use that money. So an HSA
Speaker 3: they're describing can somewhat function like a four oh one
Speaker 3: K for healthcare expenses because the fun in HSA's don't expire.
Speaker 3: You can build up a balance over the years through
Speaker 3: contributing and by investing that money, so it does compound.
Speaker 3: So there are some significant differences between hsas and fsays.
Speaker 3: Hsas are only available to people enrolled in a high
Speaker 3: deductible health plan, and we'll go through some of what
Speaker 3: makes you qualified and what doesn't. But yeah, HSA's are
Speaker 3: really great, but not everybody has access to them.
Speaker 1: Yeah, so let's go through this chart that they have
Speaker 1: on the comparison for FSA and HSA. So the first
Speaker 1: we'll go through is how to qualify. So for an FSA,
Speaker 1: your employer has to offer it through its health plan.
Speaker 1: It's just like a four oh one K or a
Speaker 1: four h three B in that you can't open one
Speaker 1: on your own unless you are your own employer and
Speaker 1: you have a business because the business needs to offer
Speaker 1: the h the FSA say, you don't have to get
Speaker 1: your health insurance from your job to open an FSA.
Speaker 1: That's important, but you do need to be eligible to
Speaker 1: enroll in it. On the other hand, you can open
Speaker 1: an HSA if you have a qualifying high deductible health
Speaker 1: planned purchase through your employer or the Affordable Care Act marketplace.
Speaker 1: You can open your own HSA if you have a
Speaker 1: qualifying plan and there are a lot Like I rolled
Speaker 1: my HSA from my last job into a Lively HSA,
Speaker 1: and we might have like an affiliate link for that.
Speaker 1: Try Frugal Friends podcast dot com, slash lively great, try
Speaker 1: it and it is. It had lower fees. So that's
Speaker 1: another thing. If you have an HSA from a former
Speaker 1: employer and you have left that that HSA is probably
Speaker 1: sitting there and they're probably charging you a couple bucks
Speaker 1: every month to hold it there. If not, like ten
Speaker 1: or fifteen, log in, check to see what they're charging
Speaker 1: you and see if opening an HSA somewhere else rolling
Speaker 1: it over there can save you some money.
Speaker 3: So to reiterate where to get one. If you want
Speaker 3: an FSA, you need to get that through your employer.
Speaker 3: If you want an HSA, you can open an HSA
Speaker 3: through your employer or directly with a bank, brokerage, or
Speaker 3: insurance company. But again with the HSA, you do have
Speaker 3: to have a qualifying high deductible healthcare plan, but that
Speaker 3: you could still open one on your own if you
Speaker 3: meet those qualifications.
Speaker 1: So then let's talk about ownership. Your FSA is owned
Speaker 1: by your employer, so if you leave that job, you
Speaker 1: cannot get access to any unspent contributions. So in addition
Speaker 1: to thinking about what am I going to say, spend
Speaker 1: this year, or if you're thinking about leaving your job,
Speaker 1: you need to think about the money in your FSA
Speaker 1: because if you leave midway through, you're going to have
Speaker 1: to spend all that money before you leave or you
Speaker 1: lose it. So that could impact a decision whether you
Speaker 1: want to leave or stay at a job. So it's
Speaker 1: not just if you have an FSA you have to
Speaker 1: use that money by the end of the year regardless,
Speaker 1: but it could impact a job decision if you want
Speaker 1: to pursue a job elsewhere. HSA, again, on the other hand,
Speaker 1: you own that. So just like I said when I
Speaker 1: left my last job, I had an HSA and I
Speaker 1: kept it and then I was able to roll it
Speaker 1: over into another HSA that had lower maintenance fees. So
Speaker 1: this means if you want to leave your job midyear,
Speaker 1: then you don't have to worry about using the health
Speaker 1: Savings account. You can that's that's free from your concern.
Speaker 3: Then, as far as contribution limits, both do have limitations
Speaker 3: on how much you can contribute annually. For an FSA,
Speaker 3: this says for twenty twenty three, but it is the
Speaker 3: same for twenty twenty four. For an FSA you can
Speaker 3: contribute thirty two hundred dollars annually, but there are no
Speaker 3: catchup contributions available for workers fifty five plus, whereas with
Speaker 3: an HSA, you can contribute annually as an individual forty
Speaker 3: one fifty four thousand, one hundred and fifty dollars. If
Speaker 3: you have a family plan, you can contribute eight thousand,
Speaker 3: three hundred dollars annually, and workers fifty five and over
Speaker 3: can contribute an extra one thousand dollars on top of
Speaker 3: whichever plan they're contributing to.
Speaker 1: Yeah, and so this is because of the tax advantages
Speaker 1: of both the FSA and the HSA, So any money
Speaker 1: you put into either is pre tax, so it lowers
Speaker 1: your income tax for your tax year, and so this
Speaker 1: becomes It's not as important for us in Florida, but
Speaker 1: if you're in a state that has your federal tax,
Speaker 1: your state tax, maybe even a city tax in addition
Speaker 1: having pre tax, having money that's contributed somewhere pre tax
Speaker 1: becomes more important. So and then for hsa IS it
Speaker 1: doesn't say this on here, but the limit when you
Speaker 1: can invest is when you get usually up to two thousand.
Speaker 1: It could have changed, but for my account, I had
Speaker 1: to have two thousand in the actual like quote unquote
Speaker 1: spending portion, and then anything above that can be spent,
Speaker 1: so like the first two thousands, and it's kind of
Speaker 1: like a highyield savings account. I don't know the interest
Speaker 1: I'm making on that, it's probably not high yield. But
Speaker 1: then anything old that I have mine invested in, I
Speaker 1: think just like a total stock market fund. I'm I
Speaker 1: should probably have checked that before I got on here.
Speaker 1: But the rest of that is just in an index fund,
Speaker 1: which is why I really liked lively that I could
Speaker 1: choose that. But that's that's why there's limits, and there's
Speaker 1: a lower limit for FSA because they don't want you
Speaker 1: to put a lot of money in there and not
Speaker 1: be able to use it all. So this is an
Speaker 1: instance where you have to be sure you want to
Speaker 1: hit your thirty two hundred. The great thing about an FSA, though,
Speaker 1: is that you can use it if you have a
Speaker 1: low deductible plan. And that's why hsas shouldn't be the
Speaker 1: one hundred percent of the time only used thing, right,
Speaker 1: it's if you need a low deductible plan. And ETNA
Speaker 1: has a really great like HSA versus FSA article on
Speaker 1: like they have actual stories of who would pick an
Speaker 1: FSA and who would pick an HSA. And so for
Speaker 1: the HSA, the I guess the I want to say
Speaker 1: the hero of the story because that's how I referred
Speaker 1: to it. It's the main character. Sorry, The main character
Speaker 1: of this story is a young man who's planning for
Speaker 1: the future. So this is a young man who is
Speaker 1: very healthy and is just thinking about the future. This
Speaker 1: is the main character of the HSA story. For the FSA,
Speaker 1: it's a mom budgeting for her family's health care. So
Speaker 1: it's because and her name is Maxine. They really do
Speaker 1: give it all for these They have written a short book,
Speaker 1: and it says given the families many trips to the doctor,
Speaker 1: Maxine chooses a low deductible health plan that means she
Speaker 1: can open an FSA to reimburse her for qualified health expenses.
Speaker 1: So if if you need a low deductible health plan,
Speaker 1: if you have a chronic illness, if you have kids
Speaker 1: that are always injuring themselves and go into the hospital,
Speaker 1: if you anticipate that you may max out your plan,
Speaker 1: then choosing an FSA is great for you because you
Speaker 1: get the added benefit of that you know the low
Speaker 1: deductile that you want, and you can also save money
Speaker 1: pre tax for the money you're going to have to
Speaker 1: spend anyway.
Speaker 3: Yeah, I think that for me is the missing link
Speaker 3: with the FSA. I remember, way back my first social
Speaker 3: work career, I had like zero benefits. But that is
Speaker 3: one thing I remember them talking about was you can
Speaker 3: set money aside for health care, but if you don't
Speaker 3: use it, then you lose it. And I'm thinking, why
Speaker 3: would I do that. I'm not a dummy, but I
Speaker 3: think for this type of situation, And I was also thinking,
Speaker 3: why would I not just set money aside If I
Speaker 3: had money to put aside for medical expenses, then why
Speaker 3: don't I just do that and then I can keep
Speaker 3: it if I don't end up having medical expenses. But
Speaker 3: as you're describing with this example, if you do have
Speaker 3: a lot of medical expenses that you know in a year,
Speaker 3: setting that money aside with that tax advantaged component, I
Speaker 3: think is that missing link that I wasn't aware of
Speaker 3: way back fifteen years ago, And it still wouldn't have
Speaker 3: been the right choice for me at that time. But
Speaker 3: I think knowing that there's reasons people choose this and
Speaker 3: it can be advantageous for you financially. You just have
Speaker 3: to really know your situation. Okay, there's a few other
Speaker 3: things on this chart that I thought was worth going over,
Speaker 3: and well, I just highlighted the one about expiration that
Speaker 3: for an FSA, you must spend all of the FSA
Speaker 3: funds before the calendar year or they will expire. So
Speaker 3: the IRS does let some employers, at their discretion, offer
Speaker 3: either a grace period through March fifteenth or the following
Speaker 3: year of the following year, or a rollover of up
Speaker 3: to six hundred forty dollars. But again, that is a
Speaker 3: reason to really consider if an FSA is going to
Speaker 3: be worth it for you, because if you contribute up
Speaker 3: to that annual amount of thirty two hundred and you
Speaker 3: don't use all of that thirty two hundred, you'll lose it.
Speaker 3: Versus with an HSA. Contributions don't expire and they can
Speaker 3: be rolled over from year to year.
Speaker 1: Yeah, and that grace period, that optional grace period is
Speaker 1: something important. If you have funds in your FSA that
Speaker 1: you can't use by the end of the year, you
Speaker 1: can just ask your employer. You know, they may not
Speaker 1: even know about the grace period that they're able to
Speaker 1: do this, and so saying like, hey, I really, I
Speaker 1: have like five hundred dollars in there, can you offer
Speaker 1: a grace period through March fifteenth so that I can
Speaker 1: can get this stuff. So that's something that you could
Speaker 1: talk about. And then as far as eligible expenses for FSA,
Speaker 1: it's going to be more or less the same for
Speaker 1: FSA most prescriptions and over the counter medications as well
Speaker 1: as medical equipment supplies, doctor visits, but not health insurance premiums.
Speaker 1: That's important. Health insurance premiums cannot be paid for with
Speaker 1: FSA contributions. And then you can use resources like the
Speaker 1: FSA store. Literally if you don't know if something's covered
Speaker 1: by your FSA, you can go to the FSA store
Speaker 1: see if it's on there. Then you know it's going
Speaker 1: to be covered, and then you can keep it, use
Speaker 1: your card to purchase it in the store, or keep
Speaker 1: your receipt. That's a really quick trick for HSA. In
Speaker 1: addition to most prescriptions, over the counter drugs, and doctor's expenses. Again,
Speaker 1: an HSA store is the same thing. I think they
Speaker 1: are owned by the same company. They are the same website.
Speaker 1: You can use an HSA balance to pay for Medicare,
Speaker 1: Cobra and long term care insurance premiums, so that's a
Speaker 1: big difference. A lot of people will use the HSA
Speaker 1: again like an investment account like a four oh one
Speaker 1: K or an IRA and keep that because there's not
Speaker 1: just a pre tax advantage with the HSA. There's actually
Speaker 1: something called the triple tax advantage of the HSA. And
Speaker 1: this is what this is what makes it the darling
Speaker 1: of the personal finance community. I think because deposits are
Speaker 1: tax deductible, growth is tax deferred, so you're getting the
Speaker 1: best you're getting a traditional IRA and a roth ira together,
Speaker 1: and spending is tax free, so there's no sales tax
Speaker 1: on it either. That's that's the big the big one.
Speaker 1: So so you have all this spending is tax free on
Speaker 1: eligible things. But once you reach a certain age, then
Speaker 1: you don't have to just spend it on health related.
Speaker 3: And that's why I call it a quadruple threat, Like
Speaker 3: it really can become like a retirement invest in investment
Speaker 3: account because I think it's sixty five. Once you reach
Speaker 3: that age, you then have the ability to utilize that
Speaker 3: money on items other than medical expenses, and so it
Speaker 3: can in some ways help to supplement your income in retirement. Now,
Speaker 3: is this what you were saying, though, Jen, about you
Speaker 3: had a previous HSA with an employer, but now you're
Speaker 3: not HSA eligible, so you can roll it over.
Speaker 1: Correct. I can no longer contribute to my HSA because
Speaker 1: I don't have a high deductible health plan. I have
Speaker 1: a health sharing plan, but my HSA is still mine
Speaker 1: and I'm still holding onto it for any I for
Speaker 1: any bill that I pay. Now that I don't have insurance,
Speaker 1: none of my bills are considered. I mean, there's no
Speaker 1: like premiums, right, So I hold on to all of
Speaker 1: my medical receipts and even the healthcare sharing like annual contribution,
Speaker 1: because I don't think that's eligible. But I'm still holding
Speaker 1: on to it because all I have to do in
Speaker 1: the future is submit those receipts. When I want to
Speaker 1: take money out of the account, I submit those receipts
Speaker 1: too lively, and then I can withdraw that amount tax
Speaker 1: free even before. And then I can spend that money
Speaker 1: on whatever I want because I've already in the past
Speaker 1: spent it on a qualifying purchase. I don't have to
Speaker 1: spend it in the year, and there's no time limit
Speaker 1: like I can in twenty years. I hold on to
Speaker 1: these receipts. I upload them and you know, submit them,
Speaker 1: and I can take all that money out whenever, and
Speaker 1: I could just let it sit and grow until I'm
Speaker 1: ready for it, and.
Speaker 3: I don't have to cool.
Speaker 1: Yeah, I don't have to wait until i'm, you know,
Speaker 1: in my sixties to take it out because I've already
Speaker 1: spent it on a lot of maternity stuff sometimes, Like
Speaker 1: you could also keep your receipts for all the small
Speaker 1: like tampons and all of that, but I have enough
Speaker 1: bigger expenses that I just keep it. I just keep those.
Speaker 3: Wow, that's cool. Yeah, okay, Well we've already described a
Speaker 3: bit on how to consider each one, but we can
Speaker 3: do one final run through of how to choose which
Speaker 3: one's going to be right for you.
Speaker 1: Yeah, I would say a. This is how you can
Speaker 1: tell if you want to do one or the others.
Speaker 1: So consider an HSA. Again, you have to have a
Speaker 1: high deductible health plan or you cannot consider an HSA.
Speaker 1: So that's the first first thing. To be eligible for
Speaker 1: an HSA, you got to have that HDHP. That and
Speaker 1: also not all high deductible health plans qualify for an HSA,
Speaker 1: so you have to have an HDHP that meets certain criteria,
Speaker 1: so double check that. And if you do, even if
Speaker 1: your employer doesn't offer the HSA, you can get an
Speaker 1: HSA on your own if it meets those certain criteria.
Speaker 1: But you are going to a you're gonna want to
Speaker 1: be really either maxing out or contributing highly to your
Speaker 1: four oh one K and your IRA. Already, the HSA
Speaker 1: is really the cherry on top. It's a great investment vehicle,
Speaker 1: but it's not what you should be prioritizing over an
Speaker 1: IRA and a four oh one K. So you can
Speaker 1: be using the HSA if you know you're not going
Speaker 1: to get really anything out of an FSA and you're
Speaker 1: already put a really good amount of money into uh
Speaker 1: A four oh one K and an IRA, because then
Speaker 1: there's no point if you're still struggling to contribute to
Speaker 1: the to the IRA, because an IRA you can take
Speaker 1: contributions out at any time penalty free. It's just the
Speaker 1: growth that has to stay in there. So really, if
Speaker 1: you're worried about being able to take money out for
Speaker 1: medical expenses, then then that really should be where you're prioritizing.
Speaker 1: But if you're if you're doing good over there, then
Speaker 1: adding an HSA is a really good idea. Otherwise we're
Speaker 1: not having this conversations because it's not super important. It's
Speaker 1: a way to optimize your finances. So and then you
Speaker 1: want to be able to have like enough enough enough
Speaker 1: margin to make it worth it, because you need at
Speaker 1: least two thousand dollars in that uh kind of like
Speaker 1: highield savings account portion in order to be able to
Speaker 1: invest anyways. So that would be if your healthy, don't
Speaker 1: anticipate making any health expense payments, if you are looking
Speaker 1: for more pre tax incentive and even trying to get
Speaker 1: some triple tax advantage in the future. HSA is a
Speaker 1: very good cherry on top, but it's not essential to
Speaker 1: your retirement plan.
Speaker 3: Yeah, and then you should consider an FSSAY if you
Speaker 3: get it through your work. If it is offered through
Speaker 3: your work, then it's available to you and consider it.
Speaker 3: Then the extra considerations are if you do have or
Speaker 3: anticipate having high medical expenses that year, and if you
Speaker 3: plan to stay at your job, because again, since it's
Speaker 3: offered through your job, if you switch jobs and it's
Speaker 3: not offered anymore, that you could lose that money that
Speaker 3: respect to so at least plan to say at your
Speaker 3: job for that year that you have that FSA for
Speaker 3: so a lot of caveats, but there still are some
Speaker 3: people where this is going to be a good decision.
Speaker 1: Yeah, and thankfully open enrollment is in November, so you
Speaker 1: can you can evaluate this be looking out for it
Speaker 1: in November to see, Okay, what is my family's health
Speaker 1: look like? As am I going to want to get
Speaker 1: anything done in January? Is my partner going to want
Speaker 1: to get anything looked at? In January? Are my kids
Speaker 1: starting weird sports?
Speaker 4: Like?
Speaker 1: Take an inventory in November and say Okay, I think
Speaker 1: we all want to get our absesses and weird marts
Speaker 1: and looked at yeah in January, So this might be
Speaker 1: the year because you can change every November, right, this
Speaker 1: might be the year we try the low deductible plan
Speaker 1: with an FSA because low deductible plans are going to
Speaker 1: be more expensive, so that's also a thing. You can't
Speaker 1: pay your premiums with an FSA. You also have to
Speaker 1: weigh the cost of Okay, if I have a high
Speaker 1: deductible plan then and an HSA, like how much am
Speaker 1: I going to pay here? And if I have a
Speaker 1: low deductible plan with an FSA, what am I going
Speaker 1: to spend here? So weigh those options for you because
Speaker 1: every employer's insurance plan is different and that is how
Speaker 1: you will figure out which one is best for you.
Speaker 1: But it's probably going to be different year over year,
Speaker 1: and so you can't say one is inherently better than
Speaker 1: the other every single year.
Speaker 3: Yeah, right. I want to do one little quick fun
Speaker 3: rundown on like what you cannot spend your funds from
Speaker 3: an FSA or an HSA to pay for because I
Speaker 3: think sometimes we think, oh, there's so much you can
Speaker 3: buy with it. I might as well, but then it
Speaker 3: doesn't cover everything. So this is knowledge worth having. You
Speaker 3: cannot use an FSA or an HSA to pay for
Speaker 3: insurance premiums, so that's your monthly out of pocket just
Speaker 3: to have the insurance. You cannot use it to pay
Speaker 3: for any future medical care. So you can't use it
Speaker 3: like a credit card like I'm going to be putting
Speaker 3: a down payment on xyz. You can't pay for gym memberships,
Speaker 3: nutritional supplements, or cosmetic stuff like teeth whitening, face lifts,
Speaker 3: hair transfers.
Speaker 1: Really, because I was thinking about a hair transplant.
Speaker 3: Yeah, anything probably volume non essential.
Speaker 1: I think volume is essential.
Speaker 3: Not medically necessary.
Speaker 1: I mean well, I how can you say hair volume
Speaker 1: is not.
Speaker 3: Essential, not medically necessary? Right, You're right.
Speaker 1: For my mental health, I need bigger hair.
Speaker 3: The one on this list that's a prizes me is
Speaker 3: gym memberships.
Speaker 1: Oh yeah, nothing preventative. They never like future like preventative
Speaker 1: care or current preventative care.
Speaker 3: No, no, they'd rather not know the crisis. They'd rather
Speaker 3: be reactive than proactive. And yeah, you can remember.
Speaker 1: And that's a whole nother podcast, not even on our show.
Speaker 1: That's a whole other podcasts episode. We'll leave it to them.
Speaker 3: But you know what is happening in this episode.
Speaker 1: This is our thing, and nobody else can have it.
Speaker 1: We will.
Speaker 3: It is medically necessary. The bill of the week.
Speaker 5: That's right, it's time for the best minute of your
Speaker 5: entire week. Maybe a baby was born and his name
Speaker 5: is Williams. Maybe you've paid off your mortgage, maybe your
Speaker 5: car died and you're happy to not I have to
Speaker 5: pay that bill anymore, Tuft bills, Buffalo bills, bill clan.
Speaker 1: This is the bill of the week.
Speaker 4: I had a baby in the beginning of the year,
Speaker 4: but last year I had paid fifty five hundred dollars
Speaker 4: to have a home birth, but I wound up having
Speaker 4: to transfer to the hospital. And I was supposed to
Speaker 4: have him in December, so my deductible had already been
Speaker 4: met at that time, but he didn't come until January,
Speaker 4: so then we're not transferred to the hospital. I had
Speaker 4: built up a balance of seventy eight hundred dollars and
Speaker 4: I was able to get nineteen hundred dollars off of
Speaker 4: my collective hospital bills. And then we also had a
Speaker 4: very large tax bill of forty six hundred dollars so
Speaker 4: I was able to pay off the hospital bills and
Speaker 4: our tax bills. So that was a great win for us.
Speaker 1: Oh wow, Joshlyn, what a great I remember birds man,
Speaker 1: babies just don't come when you want them to come
Speaker 1: unless you schedule your C section. But I remember looking
Speaker 1: at my hospital bill. I told you this, Jill, when
Speaker 1: they Bayfront sent me emailed me. Since I'm on healthcare Sharing,
Speaker 1: they sent all the bills to me, and they made
Speaker 1: that number in that email so large you could not
Speaker 1: hide it. And it was like, God, it must have
Speaker 1: been like seventy eight thousand dollars or something like that.
Speaker 1: I know seventy eight thousand dollars how much I paid
Speaker 1: off in debt. So maybe like I'm confusing the numbers,
Speaker 1: but it was it was like that.
Speaker 3: It was that like seventy or eighty of like a
Speaker 3: sex figure.
Speaker 1: I knew I didn't have to pay it. Yeah, because
Speaker 1: then I submitted it to Healthcare Sharing and they got
Speaker 1: it like figured out, I think, and totally actually ended
Speaker 1: up paying them like fourteen thousand or something because they
Speaker 1: also negotiated. That's why I went with Liberty because they
Speaker 1: do the negotiating for you, and Mama did not have
Speaker 1: time with a newborn. But that what a shock, man,
Speaker 1: that's an expensive hotel stay.
Speaker 3: It never ceases to amaze me that we don't listen
Speaker 3: to these bills ahead of time to our podcast content.
Speaker 3: But like it does align.
Speaker 1: Goldie is probably doing this. We're so shocked every single
Speaker 1: how is it so perfect?
Speaker 3: It's probably Goldie because Goldie is perfection. That's I would
Speaker 3: imagine that if I were to be having a baby,
Speaker 3: that'd be one of my major concerns is and you know,
Speaker 3: reaching my deductible through just the pregnancy and then getting
Speaker 3: into a new medical coverage year and needing to meet
Speaker 3: the deductible all over again with the birth.
Speaker 1: Like that baby's born in January deserve a punishment when
Speaker 1: they are an adult, because you also miss out on
Speaker 1: that tax deduction for the previous year you were, Joshlyn,
Speaker 1: you were pregnant for most of last year and were
Speaker 1: not financially compensated for that via the tax deduction. And
Speaker 1: so when your kids starts asking for real expensive toys
Speaker 1: one day, real expensive things, you just say, like, hey,
Speaker 1: you owe me for coming out in January.
Speaker 3: You chastise them for preferring the warmth of the.
Speaker 1: Uterus versus for all January babies holds of the x tire.
Speaker 1: This is my hot take for all of you.
Speaker 3: Come at Wow. Eric's a January baby.
Speaker 1: Yes, he's deep in January though so like his mom
Speaker 1: probably knew she knew he was coming Janie. But for
Speaker 1: those ones that plan for.
Speaker 3: December jan one, chan.
Speaker 1: Few weeks of January, that's for you.
Speaker 3: And on the other hand, those December thirty one babies,
Speaker 3: they are special.
Speaker 1: Extra gifts and Christmas because they got You got a
Speaker 1: tax deduction that you probably weren't thinking about. Wow, blessings.
Speaker 3: If you all are listening, you've got something really just
Speaker 3: that's gonna send us on a tangent. Your name is Bill.
Speaker 3: You got a bill. You don't mind paying bills, you
Speaker 3: don't like bills. You didn't pay a bill, you.
Speaker 1: Got a really good tax deduction.
Speaker 3: Frugal friendspodcast dot com slash bill We're ready for it
Speaker 3: and now it's time for.
Speaker 1: All right, So Goldie's question to us is how much
Speaker 1: do you contribute to your FSA or HSA each year?
Speaker 1: And well, you go first job, we'll go into the
Speaker 1: inner workings of our companies that Frugal Friends does not
Speaker 1: offer insurance.
Speaker 3: We are terrible employers to ourselves.
Speaker 1: We are Yeah, we are slave drivers essentially, that's probably
Speaker 1: that's a horrible phrase to use. We are just overworking
Speaker 1: our employees ourselves. Yeah, us and yeah, so we we
Speaker 1: don't have it. But when I had an HSA, I
Speaker 1: contributed to it for two years because I was maxing
Speaker 1: out two rath diiras and two and one four oh
Speaker 1: one k and so then in addition I maxed out
Speaker 1: and HSI. This was pre kids, after debt, we were
Speaker 1: debt free, we had no kids. So this was a
Speaker 1: very great time financially at GRIPS, so great. It was
Speaker 1: the time to be live. And so now I keep
Speaker 1: up with that. I can tell you, Jill, why don't
Speaker 1: you answer, Why don't you talk about your your new thing?
Speaker 3: You found it out.
Speaker 1: I'll look up my HSA.
Speaker 3: Okay, So I currently do not have either an FSA
Speaker 3: or an HSA. And with a medical sharing plan, which
Speaker 3: we've already said I have, I am on. So I
Speaker 3: can't have an HSA with the medical sharing plan. It's
Speaker 3: technically not insurance. Even though it is a very high deductible.
Speaker 3: They don't even call it deductible because they can't because
Speaker 3: it's not insurance, but you choose your deductible yes, yeah, yeah, yeah, yep.
Speaker 3: And it is when I hear other people talk about
Speaker 3: what they're high deductible, like mine's ten thousand dollars medical
Speaker 3: expenses will not be covered until I have paid ten
Speaker 3: thousand dollars out of pocket. And I think high deductible
Speaker 3: plans can be considered like fifteen hundred to two thousand dollars,
Speaker 3: so something far more reasonable to kind of have set
Speaker 3: aside in like a sinking fund or emergency fund. However,
Speaker 3: I did just recently discover some thing, and unfortunately I
Speaker 3: don't have it all worked out for this podcast to
Speaker 3: give you all an affiliate link for it. But there
Speaker 3: is a program out there that does provide it's a
Speaker 3: medical sharing plan, but it allows you to be eligible
Speaker 3: for an HSA. So I believe this is relatively new
Speaker 3: in the past couple of years because I'm just now
Speaker 3: seeing it. But I one day I did a ton
Speaker 3: of research on this and got really excited. It's definitely
Speaker 3: something I personally am considering now. The one downside that
Speaker 3: I've discovered is that it is a little bit more
Speaker 3: of a monthly cost. They don't call it a premium,
Speaker 3: but it's essentially a monthly premium because you are technically
Speaker 3: paying for two things like the plan and the eligibility
Speaker 3: for an HSA. So it would be maybe about triple
Speaker 3: what I'm paying currently for my MEDAE sharing plan, but
Speaker 3: still less than a high deductible plan that I would
Speaker 3: get through the Affordable Care Act marketplace. So definitely something
Speaker 3: to consider. I want to say, it's called like HSA
Speaker 3: for America, for America. Yeah, HSA for America. They've got
Speaker 3: like an HSA secure plan. If we do get more
Speaker 3: information on this and it's something that I really will recommend,
Speaker 3: I will put this in the friend letter. So if
Speaker 3: you're not getting the Friend Letter Frugal friendspodcast dot com,
Speaker 3: sign up for it. It's free. We're giving you tips
Speaker 3: like this type of things. What's the best really our
Speaker 3: whole goal right now, we found ourselves in a place
Speaker 3: where we are trying to teach ourselves and others how
Speaker 3: to spend better, teaching the skill of spending, and that
Speaker 3: in many ways includes how to buy the things that
Speaker 3: we all need to buy, how to get the best
Speaker 3: possible deal, how to be efficient with our money, how
Speaker 3: to buy quality over quantity. So this would be one
Speaker 3: of the types of things that we would put in
Speaker 3: that friend letter, is how to make the best decision
Speaker 3: with our medical insurance with an FSA or an HSA,
Speaker 3: basically what you're getting on the podcast, even more deep dives.
Speaker 3: Sometimes we even talk about how to get pots and
Speaker 3: pans for the best possible price that are going to
Speaker 3: have longevity, but really anything. So definitely get that. I
Speaker 3: will I'll put more about that eventually in the friend letter,
Speaker 3: but just know that this does exist. If you're like
Speaker 3: Jen and I, you're on a medical sharing plan and
Speaker 3: you'd really love the opportunity to have an HSA, it
Speaker 3: could be possible for you. Again, if you're willing to
Speaker 3: pay just a little bit more monthly for this type
Speaker 3: of thing.
Speaker 1: Yeah. Otherwise, So I just was looking up my life
Speaker 1: Lively account and so for Lively it is a minimum
Speaker 1: of three thousand in your spending account, and in my
Speaker 1: one that was I think it was with PNC Bank
Speaker 1: was the one through my employer that was a minimum
Speaker 1: of two thousand. So that's something to look at. But
Speaker 1: the fee structure is really good. There are no monthly
Speaker 1: fees at Lively. If you keep three thousand in your
Speaker 1: spending account. But if you want to have no minimum,
Speaker 1: So if you want to put all three thousand plus
Speaker 1: everything over into they invest with Schwab and I just
Speaker 1: have a total stock market index fund over there, then
Speaker 1: you can just pay twenty four dollars a year. So
Speaker 1: if having that extra three thousand on top of what
Speaker 1: you have is going to make you more in interest
Speaker 1: than twenty four dollars a year, it makes more sense.
Speaker 1: But you have to get to a certain threshold of
Speaker 1: saving to make that pay for itself. So that's and
Speaker 1: I don't think we have a Lively affiliate link. I
Speaker 1: just checked and that link I gave earlier didn't work.
Speaker 1: But I yeah, I like Lively. Maybe I will make
Speaker 1: it work. I'll make it, make it, make it work work,
Speaker 1: I'll make it work. But it has been good to me,
Speaker 1: and I'm not paying the fees that I used to
Speaker 1: be paying at PNC once I once I left my employer.
Speaker 3: Nice.
Speaker 1: Yeah, So thank you all for listening. This is a
Speaker 1: dry topic, but I hope if it for the small
Speaker 1: number of you that needed it, I hope it helped you.
Speaker 1: And if you could leave Iranian Review, that would be great.
Speaker 1: It will help us figure out that these specific episodes
Speaker 1: are kind of like what people are wanting. Like Beth
Speaker 1: b the Bulah says, great podcast five stars. As a
Speaker 1: fellow frugal person, I love your ideas and conversations. I
Speaker 1: especially love the interviews and tips that you have. Keep
Speaker 1: it up, ladies, it's a nice one.
Speaker 3: That is a nice one. We love it when you
Speaker 3: all review.
Speaker 1: It could also be Beth Ebulah or be the Bulah.
Speaker 3: I read it as be the Bulah, but okay, great, yeah,
Speaker 3: thank you, thanks for that kind review. If you all
Speaker 3: listening have not yet left us a rating and review,
Speaker 3: now is the time we are doing a PSA, a
Speaker 3: call to action, just begging. Basically, we're just over here
Speaker 3: begging and pleading because.
Speaker 1: Am I think you still have one day? This is
Speaker 1: the last day too. I know we didn't say this
Speaker 1: at the top of the episode, so if you're hearing this,
Speaker 1: this is your last opportunity today. Only send us a rate,
Speaker 1: do a rating and review on Apple, take a screenshot
Speaker 1: before you submit it, send it to us. Jen at
Speaker 1: Frugal Friends Podcast, we're giving away one hundred dollars gift card,
Speaker 1: so if you want.
Speaker 3: One hundred dollars running. Then submit, Yeah, because we got
Speaker 3: to get those We got to get those ratings and
Speaker 3: reviews up there. It's part of our efforts for selling
Speaker 3: our book is having our ratings and reviews.
Speaker 1: We have a fantastic rating. I just want more.
Speaker 3: Yeah, exactly, Yeah. It helps people see what type of
Speaker 3: podcast we are.
Speaker 1: We legit.
Speaker 5: Do that.
Speaker 1: If you believe we are legit, almost too legit to quit,
Speaker 1: then rate and review us because we might quit otherwise
Speaker 1: if you're not legit enough.
Speaker 3: Okay, thanks everyone, see you next time.
Speaker 1: Frugal Friends is produced by Eric Sirianni. Okay, Jill, should
Speaker 1: I talk about my faral child?
Speaker 3: Oh my gosh, yes, this was nuts.
Speaker 1: So so this morning my one year old is feral.
Speaker 1: He is unhinged. And so this morning I get the
Speaker 1: kids ready and off to school alone because Travis leaves
Speaker 1: for work before we wake up, and I have Kai
Speaker 1: on his tablet. I bribed him to get dressed and
Speaker 1: ready to go by saying he could be on his
Speaker 1: tablet before school. And I got baby like in high chair,
Speaker 1: eight a banana ate, some yogurt mouths, and it's time
Speaker 1: and we are having a good morning. You know, this
Speaker 1: is it's good by all intents and purposes. So I
Speaker 1: get baby out of high chair because he loves to
Speaker 1: stand up. It doesn't matter if he's strapped in or not.
Speaker 1: He wriggles himself up, stands up in the high chair
Speaker 1: and will like put his leg over to just get down.
Speaker 1: And I've never let him get further than that. I
Speaker 1: don't want to know what happens after that. So he's
Speaker 1: not strapped in, then no, but he'll do it even
Speaker 1: if he is struck. Yeah, it doesn't matter. So like,
Speaker 1: it just doesn't. He does it at home, he does
Speaker 1: it a daycare, like.
Speaker 3: He figures that away.
Speaker 1: Yeah, he does it in karts at the supermarket or
Speaker 1: at home, depot gets out of the strap. It just
Speaker 1: doesn't matter. He's a little slippery, little snake. And so
Speaker 1: I get him out of the high chair because I
Speaker 1: don't want him to kill himself. So I move my
Speaker 1: coffee and my water from the coffee table up to
Speaker 1: the high chair so that he doesn't pour those things.
Speaker 3: Out, right, because now he's down on the ground and
Speaker 3: so he's up up piate.
Speaker 1: Eighteen things going on in my head at once, right,
Speaker 1: And so I'm like, it's time to go, I go
Speaker 1: into my bathroom to brush my teeth. I come out
Speaker 1: a minute later, and Atlas is just standing there with
Speaker 1: a smile on his face, and my coffee cup wrong
Speaker 1: side down and he's standing in a puddle of coffee.
Speaker 1: It's all over him and.
Speaker 3: And he's smiling. He's not screaming. He did not It
Speaker 3: wasn't because it's not.
Speaker 1: A mother's coffee is never hot, so uh, and we
Speaker 1: have to go like it's the minute, Like I left
Speaker 1: my teeth brushing, it's the last thing I do. And
Speaker 1: then we go and normally, actually sometimes I'll strap him
Speaker 1: into the car seat and then go back in and
Speaker 1: brush my teeth. But we were just having such a
Speaker 1: good warning that I really let my guard slip. And
Speaker 1: I come back he is standing in the puddle of coffee.
Speaker 3: And was this on your wood floor or was this
Speaker 3: over a carpet wood floor?
Speaker 1: Yeah, And so I'm like, what do I do? And
Speaker 1: so I take off his clothes and I'm holding him
Speaker 1: out like the poop hold, like when you don't want
Speaker 1: to hold them on their butt, you're just holding them
Speaker 1: in their armpits. And then I'm using my foot with
Speaker 1: the clothes and a dishrag to like wipe up.
Speaker 3: Oh he's clothes to yeah, funny.
Speaker 1: And to wipe up the thing, the puddle, so that
Speaker 1: as we speak, the clothes and the dish raggers are
Speaker 1: still still on the ground, but there's like not a pool,
Speaker 1: like a puddle.
Speaker 3: That's great.
Speaker 1: And then I just carry him into his room, wipe
Speaker 1: him with a wet wipe and put different clothes on him,
Speaker 1: and then immediately to.
Speaker 3: The car, immediately out the door. And you know what,
Speaker 3: you still made it to my house early today.
Speaker 1: Well, because I chose not to work out. Well, we
Speaker 1: had a deadline when we had to be at school
Speaker 1: and daycare, and so we still made those deadlines.
Speaker 3: Sometimes it's sacrifice, but it's not deprivation.
Speaker 1: Yeah, I don't know how that I would. I had
Speaker 1: already decided not to work out before the coffee thing happened. Yeah, okay,
Speaker 1: but this just meant I could tell you the story earlier.
Speaker 1: And yeah, like unhinged.
Speaker 3: Will Travis get home before you today?
Speaker 1: No, I will get home first, so I'll finish cleaning
Speaker 1: it up.
Speaker 4: Yeah.
Speaker 1: I took a video of Atlas over the weekend because
Speaker 1: he always stops doing weird stuff as soon as I
Speaker 1: pull my camera out. But this weekend I really caught
Speaker 1: him doing something that was just He climbed up to
Speaker 1: the top of the coffee table and is just spinning around.
Speaker 3: In the confirmed. I'm watching Yellow. He's on a table spinning.
Speaker 1: And you know, the sounds not on, but he is yelling.
Speaker 3: And then he fell and he knocked something off the table.
Speaker 3: But he's fine.
Speaker 1: Yeah, he's always fine, thankfully.
Speaker 3: He just wants to be higher than he currently is.
Speaker 1: Yeah.
Speaker 3: And if he's not doing that, he wants destruction, yes,
Speaker 3: And I can't wait to see what happens next.