If you are paying out of pocket for incontinence products, using an FSA, HSA or HRA to pay for them is a great way to save money - and receive other benefits such as tax advantages.
Generally, adult diapers and other incontinence supplies are eligible for purchase or reimbursement with these accounts.
There are a few differences between FSAs, HSAs and HRAs - and how to use them for your incontinence supplies - we'll go through both to ensure you get the most out of your tax-free dollars.
What is a Flexible Spending Account?
An FSA is a savings account dedicated to the reimbursement of out of pocket medical expenses. You can set the amount you'd like to contribute each year, with a maximum of $2,750.
The contributions are then automatically deducted from your paycheck - and these contributions are not taxed.
Your funds will remain in your FSA account until you request reimbursement for your purchases. However, the contributions do expire at the end of the year so it's important to be able to use all of your FSA dollars- so as to not lose them.
FSA accounts are great for those who have a medical condition and have predictable, high medical costs as a result.
What is a Health Savings Account?
An HSA is also used to pay for medical supplies and expenses which are not covered by your insurance. Similarly to an FSA, you can choose the amount you'd like to add, and the contributions are automatically added to the account from your paycheck.
The contributions are not taxed, and can be deducted from your gross income, thus reducing your income taxes as well.
The main advantage of an HSA over FSA is that it functions as a savings account owned by the employee.
Anyone can contribute to the HSA - such as a spouse - and the contributions can roll over from year to year - unlike FSA funds which expire.
This allows you to continue adding to your HSA until you enroll in Medicare at the age of 65.
What is a Health Reimbursement Arrangement?
An HRA is not a savings account owned by the employee or employer like HSAs and FSAs.
Instead, they are a program offered by an employer in which they set aside funds for the employee to pay for qualifying medical expenses.
The funds are contributed by the employer and do not come out of the employee's paycheck.
Similarly to an HSA, contributions may be deducted from your gross income, and thus help reduce the amount you pay in income tax. Contributions also roll over to be used in later years.
Since an HRA is not a savings account, what happens to the funds when an employee leaves the company is up to the employer.
Are Adult Incontinence Products HSA/FSA/HRA Eligible?
There are thousands of products that qualify as are HSA/FSA eligible items, and included are incontinence supplies. At Aeroflow Direct, all our adult incontinence care products are FSA, HRA and HSA eligible, including bladder control pads, tabbed briefs, protective underwear, underpads and catheters.
You can purchase your products with a debit or credit card, and then get reimbursed through your HSA, FSA or HRA. Therefore, it is important to keep your receipts in order to get reimbursed.
Some providers issue debit cards for you to use to purchase your products, but this is not necessary to use your funds.
Are Baby Diapers HSA/FSA/HRA Eligible?
Unfortunately baby diapers for infants, such as Pampers, do not qualify as eligible expenses through an FSA, HSA or HRA. However, if your toddler or child has a diagnosed medical condition that would keep them from being potty trained, their incontinence products would qualify. A letter of medical necessity may be required before reimbursement.
There are many brands that offer child and youth incontinence products, including overnight diapers and pull-ups for bedwetting. Some of our favorite HSA/FSA eligible products include Comfees DriNite Youth Pants, Cuties SleepOvers Youth Pull-Ups and Prevail Youth Briefs - Maximum Absorbency.
While incontinence supplies are a medical necessity for many people, most private insurance companies do not cover the costs, and for those who do not qualify for Medicaid, the financial burden can be great.
Fortunately, there are options out there to help reduce the costs, including FSAs, HSAs and HRAs.
These accounts make for great ways to get tax advantage and save money not only on your incontinence supplies, but on prescriptions, over-the-counter medications, co-pays and more!