What Are HSA and FSA Accounts?
The Short Answer
HSAs and FSAs are tax-advantaged accounts that let you pay for qualified medical expenses with pre-tax dollars. This means you keep more of your money compared to paying out of pocket with regular income.
Most people use them for co-pays, prescriptions, and doctor visits. But for qualified customers, Truemed also enables HSA/FSA spending on products like fitness equipment, supplements, and sleep technology when supported by a Letter of Medical Necessity (LMN) from a licensed clinician.
Health Savings Account (HSA)
An HSA is a personal savings account tied to a High-Deductible Health Plan (HDHP). That pairing is a requirement: you can only open and contribute to an HSA if you are enrolled in a qualifying HDHP.
Key features
- Funds never expire. Your HSA balance rolls over year after year with no deadline to spend it.
- It is yours, not your employer’s. Your HSA stays with you if you change jobs, switch health plans, or retire.
2026 contribution limits
You can contribute via payroll deductions or direct bank transfers.
Contribution limits are adjusted annually by the IRS. Visit irs.gov for the most current figures for your tax year.
Flexible Spending Account (FSA)
An FSA is an employer-sponsored benefit that also lets you pay for qualified medical expenses with pre-tax dollars. Contributions reduce your taxable income and withdrawals for eligible expenses are tax-free, but the FSA works quite differently from an HSA in a few important ways.
Key features
- No HDHP required. You can have a Health Care FSA regardless of what type of health insurance plan you are enrolled in.
- Employer-dependent. FSAs are offered and administered by your employer. You cannot open one on your own.
- Use it or lose it. FSA funds generally expire at the end of your plan year. Many employers offer a grace period of up to 2.5 months or allow a small carryover (up to $680 in 2026), but any remaining funds beyond that are forfeited.
- Not portable. If you leave your job, your FSA funds typically stay with the plan.
2026 contribution limit
The IRS caps individual Health Care FSA elections at $3,400 per year.
Grace periods and carryover rules vary by employer. Check with your HR or benefits coordinator to understand the specific rules for your plan, especially as the end of your plan year approaches.
HSA vs. FSA: Side-by-Side
If you have access to both, you generally cannot contribute to a standard Health Care FSA and an HSA at the same time. There are exceptions for limited-purpose FSAs; see the section below.
What Can You Spend These Funds On?
Both HSAs and Health Care FSAs cover expenses that qualify as medical expenses under IRS Code Section 213. The IRS defines these as expenses incurred for the “diagnosis, cure, mitigation, treatment, or prevention of disease,” or for treatments affecting any structure or function of the body.
Common automatically eligible expenses include:
- Doctor visits, specialist consultations, and diagnostic tests
- Prescription medications
- Mental health therapy
- Dental and vision care
- Medical devices and equipment
- Over-the-counter medications and menstrual care products
Some purchases can qualify when a licensed clinician determines the purchase is medically necessary for treating a specific diagnosed health condition. That is exactly what a Letter of Medical Necessity (LMN) documents to enable purchases like gym memberships, nutritional supplements, saunas, or fitness trackers.
The IRS is explicit that expenses that are “merely beneficial to general health” do not qualify. Eligibility turns on whether there is a documented medical reason tied to a specific condition, not on the product category alone.
How Truemed Fits In
Truemed helps qualified customers use their HSA or FSA on purchases like fitness equipment, sleep solutions, supplements, and recovery tools when those purchases are medically appropriate for their health needs.
Here is how it works:
- You shop at a Truemed partner brand and complete a brief health intake form
- An independent, licensed clinician reviews your health information
- If your purchase qualifies, you receive an LMN that documents the medical necessity
- You use your HSA/FSA card directly at checkout, or reimburse yourself after purchase
The LMN is what brings these purchases into IRS compliance under Section 213. Truemed does not change the rules; it helps you work within them.
For a full walkthrough, see How Truemed Works.
FSA Types That Do Not Work with Truemed
Not all FSAs cover the same expenses. Two common variants are restricted in ways that make them incompatible with Truemed:
- Limited Expense Health Care FSA (LEX HCFSA)
This is a special FSA designed for employees who have both an FSA and an HSA. To protect HSA eligibility, the LEX HCFSA is restricted to dental and vision expenses only. General health purchases, including anything through Truemed, are not covered by this account type. - Dependent Care FSA
This account covers childcare and dependent care costs: daycare, preschool, after-school programs, and similar expenses. It is entirely unrelated to medical expenses and cannot be used with Truemed.
If you are not sure which type of FSA you have, check your benefits portal or ask your HR coordinator.
Do Not Have an Account Yet?
HSAs and FSAs are typically set up through your employer during annual open enrollment. If you missed enrollment or are unsure what is available to you:
- Contact your HR department or employee benefits coordinator
- Log in to your employer’s benefits portal to review your elections
If you are enrolled in a High-Deductible Health Plan, you are likely eligible to open an HSA. Some financial institutions and HSA providers also allow individuals to open accounts directly, outside of employer enrollment.
Questions?
If you are not sure whether your account type is compatible with Truemed, or you have questions about the reimbursement process, we are here to help.
- Help center:help.truemed.com
- Email:support@truemed.com
