People with eligible medical expenses or healthcare-related costs may use an FSA or HSA card to pay for them. Using these cards helps people save on taxes while making it easier to cover medical or health costs with designated funds. It is common for people to wonder who can accept HSA payments and FSA payments when considering how to use their funds. Consider the following details to learn more about who can accept HSA payments and FSA payments and for what purposes.

What is an HSA?

An HSA or Health Savings Account is a savings account with funds used to pay for eligible medical expenses. Funds in the account are set aside on a pre-tax basis. This means the money set aside for the account is not taxed. When you open an account, you'll receive an HSA debit card for eligiblemedical expenses. Different entities, such as health insurance companies and financial institutions, provide these accounts.

What is an FSA?

An FSA or Flexible Savings Account is similar to an HSA. The account covers out-of-pocket health care expenses. Likewise themoney in FSA is not taxed, and the account also issues a debit card to access these funds. FSA differs from HSA because they are not limited to high deductible plans. Additionally, if you leave your job, you lose your FSA funds, but you can roll over your HSA funds to another one.An FSA, through an employer, may require that the funds to be spent by the year's end. Employees considering this option should review requirements and timelines to ensure they don't lose funds.

What Merchants Accept FSA and HSA Cards?

Certain merchants thatprovideeligible healthcare services and health-related goods can accept FSA and HSA cards. Businesses that regularly accept the cards include dentists, medical supply stores, vision centers, hospitals, doctors, etc. Everydayeligible card expenses include copays, deductibles, dental and vision services such as checkups and exams, chiropractic care, and over-the-counter medical products. Many merchants accept the cards butthey must be a certifiedmerchant or business and process these payments in compliance with the IRS guidelines.

How Businesses Can Accept FSA and HSA Cards

For a business to accept FSA or HSA funds, they need to be classified as a qualifying merchant through an FSA or HSA payment processor. The processor may assign a healthcare code to the business that ensures it can process FSA or HSA payments. Alternatively, if the business is not a healthcare related company, then theywill need to have an IIAS system in place so that they can authenticate eligible purchases.

Health Savings Accounts and Flexible Spending Accounts make it easier for individuals and families to pay for medical and healthcare expenses. Funds in the account are pre-tax earnings. Businesses in the healthcare industry qualify to receive payment through these accounts by meeting specific requirements. An FSA or HSA payment processor knows the importance of compliance for medical businesses when receiving these card payments. They can ensure a business meets requirements and eliminate exorbitant fees to provide a positive experience for both customers and businesses.