Unsure what FSA or HSA cards are, and how you can incorporate them into your offering? This article enables you to:
- Learn the fundamentals of FSA/HSA cards as a method of payment for nutritional care.
- Understand the benefits of using this form of payment in your business and how to offer this as a method of payment, whether you take insurance or not.
- Educate clients on how they can use these services to work with you.
What is an FSA or HSA card?
Flex Spending Accounts (FSA) and Health Savings Accounts (HSA) are commonly used bank accounts that employees can set up through an employer to set aside pre-tax money to pay for qualified medical expenses.
By accepting FSA and HSA cards in your business, you’ll enable your clients to use pre-tax dollars, that they have already set aside for healthcare expenses, to work with you. Account balances are added to cards at the beginning of each benefits year, and expire at the end of a year (note: there are limitations on what can be carried over year to year – many plans are “use it or lose it” – read more below).
Clients receive a credit card specifically designated as an HSA or FSA card, that can also be used for out-of-pocket care, copays, coinsurance, deductibles, prescriptions and medical equipment. Using pre-tax dollars is advantageous to clients because they can use pre-tax dollars to pay for these expenses, lowering their overall healthcare costs for the year.
Frequently Asked Questions: HSA / FSA cards in Nutritional Care
1. What is the difference between an HSA and FSA?
Clients that have high-deductible health insurance plans will typically have HSA accounts. In this case, clients will use their HSA to pay towards their deductible (out-of-pocket payment required before insurance starts covering healthcare expenses). On top of this, a client may add additional dollars to their HSA for more planned healthcare spending, to save on post-tax expenses. In the case of nutritional care, clients may pay out of pocket for counseling with HSA until they have met their deductible payment for the year. HSA balances carry over, year over year, and employers can contribute to HSA accounts.
For Flexible Spending Account balances at the end of the benefits year, only $500 will rollover to the next year. That means any additional money they’ve contributed to their account will be lost. This use-it or lose-it policy does not apply to HSA accounts..
2. What can clients use their FSA or HSA cards for?
Clients receive a comprehensive list from their healthcare provider and the IRS for qualified expenses. Here are some common nutrition-related expenses that are typically covered with an FSA or HSA account. Note: for most nutrition and general wellness counseling or services, a client will likely need to obtain a letter of medical necessity (LMN) from their doctor. This IRS-required letter verifies that the services or products being used towards and FSA or HSA is for a diagnosis, treatment, or prevention of a disease.
FSA and HSA qualified expenses for nutritional care (generally covered, but may require a letter of medical necessity or prescription from a physician)
- Nutrition screening tests (DNA, nutrient/vitamin levels screening, food sensitivity, metabolism, body composition likely covered, may require a LMN)
- Vitamins and supplements (with a prescription)
- Laxatives (with a prescription)
- Expenses paid for aids to weight loss are reimbursable when the weight loss program is to treat a medical illness. Aids include pedometers, mixers, scales, action planners, recipe books and audio tapes (LMN required)
- Nutrition counseling with a dietitian is eligible (LMN required)
- Weight loss equipment (with prescription)
- Fitness programs (as treatment for a medical condition diagnosed by a licensed healthcare professional with a LMN)
- Health club dues (as treatment for a medical condition diagnosed by a licensed healthcare professional with a LMN)
3. What services or products are generally not covered with an FSA or HSA card?
FSA and HSA expenses for nutritional care (generally NOT covered)
- Late cancellation fees
- Over the counter vitamins and supplements (with no prescription)
- Expenses paid to alternative providers for homeopathic or holistic treatments or procedures are generally covered if there’s a letter of medical necessity
- Expenses paid to a dietitian for general wellness services is likely not covered without relating to treatment for a medical condition
- Weight loss equipment for general wellness
- Physical activity/classes for general wellness
- Weight loss program unless the weight loss is a treatment for a specific disease diagnosed by a physician (such as obesity, hypertension, or heart disease)
3. How can I incorporate HSA / FSA cards into my payment procedures?
- When asking for payment information from your client, ask if they have an FSA/HSA card they would like to use in conjunction with other forms of payment
- Let your client know that it’s likely that they can use their FSA/HSA card for your services, but that they are responsible for any charges that do not go through (best practice: include this in your Financial Agreement Policy form, and ask for a back-up method of payment).
- Provide a receipt to your client to save for their records. If a client did NOT sure as FSA/HSA card for the services, you can provide them with a receipt or Superbill to submit directly to their healthcare plan for possible reimbursement (handled by the client)
- Encourage clients to use their FSA balance before the benefits year end, otherwise they may lose their savings
For Healthie members:
How to process FSA or HSA card in Healthie
Process an FSA or HSA card exactly as you process a credit card within Healthie’s payment processor. Within Healthie > Client Profile > Add card. Clients will be charged as normal, and receive a receipt of payment directly to their email.