Can you share how you manage your FSA or HSA in YNAB?

ErinErin Posts: 1,377Member, Moderator, Administrator, YNAB Team, Beta Tester
Hey folks!

I'm looking to improve our support documentation on FSAs and HSAs, so I started doing some research this week. I don't have one of these accounts so I don't know much about them. Boy is there a lot to know!  Would some of you mind sharing how yours work if you have one and how you handle it in YNAB?  I specifically want to know things like:

  • Are deposits to your HSA/FSA made before you are paid?
  • Do you spend directly from the HSA/FSA account?
  • Are you reimbursed after the fact?
  • Do you have one  that you decided not to track in YNAB at all? Why?
  • What type of YNAB account did you set up for it (If you are using one) and why did you choose that option?
I can see that there lots of different ways they are handled, so I'm looking to find common approaches and best practices.  And of course I want to keep our recommendations as simple and user friendly as possible. :)  Thanks for any help!

Comments

  • ImprovDebiImprovDebi Posts: 202Member
    Hi Erin,

    I'll try to help with HSA.
    • Are deposits to your HSA/FSA made before you are paid?
      • Currently our HSA is funded by payroll deduction and the deposit is made on the pay date.
      • In previous years, the company made a lump contribution at the beginning of the insurance year (I really miss that)
    • Do you spend directly from the HSA/FSA account?
      • We have a debit card and checks for the HSA account that we can use and the money is pulled directly from the account.
    • Are you reimbursed after the fact?
      • Since we are wholly in charge of our HSA account, it is up to us whether to reimburse expenses or not. If funds are not available in the HSA when medical expenses occur, we pay them with budgeted money and can reimburse ourselves via check when the balance in the HSA will allow. We don't generally do this, preferring to let the funds build.
    • Do you have one  that you decided not to track in YNAB at all? Why?
      • Nope, I like everything in YNAB
    • What type of YNAB account did you set up for it (If you are using one) and why did you choose that option?
      • Ours is set up as an off-budget savings account.
        • Off-Budget so no categories are needed. We don't need to categorize because
          • Our HSA money can only be used for medical expenses
          • We don't have any specialized medical needs that I want to track
        • Savings account because
          • It can roll over from year to year
          • It accrues interest
    Hope that helps.
  • Turf_HackerTurf_Hacker Posts: 6,088Member, Moderator, YNAB Team, Beta Tester

    Here's how I work with my HSA:

    • Are deposits to your HSA/FSA made before you are paid?
      • HSA deposits generally happen right around payday, though they may lag or lead payday by a day.
    • Do you spend directly from the HSA/FSA account?
      • Yes, we have a debit card that is tied to this account.
    • Are you reimbursed after the fact?
      • We have reimbursed ourselves when we've needed to pay for medical expenses before the account balance had grown large enough.  To reimburse or not is up to us if we pay with after tax dollars.
    • Do you have one  that you decided not to track in YNAB at all? Why?
      • I track our one and only HSA in YNAB.  It is useful to be able to check the account balance before trying to use the associated debit card, especially with the mobile app.
    • What type of YNAB account did you set up for it (If you are using one) and why did you choose that option?
      • Currently I'm using an on budget checking account (I previously had this account off budget).  It is on budget for the somewhat silly reason that I like to see the total account balance and total category balance match at the beginning of the month in the iPhone app (another good reason to eliminate the account and category balance totals from the opening screen of the app).  With this account on budget, there is only a mismatch between these after receipt of the first paycheck (categorized as income for next month).
      • I selected checking account because it works most like an interest-bearing checking account (although in YNAB there is no functional difference between the checking and savings account types).  I can spend directly from the account using the debit card, making it look most like a checking account.
  • wedjan245wedjan245 Posts: 1,045Member
    • Are deposits to your HSA/FSA made before you are paid?
      • Deducted by payroll on the pay day.

    • Do you spend directly from the HSA/FSA account?
      • No, we pay first and the reimbursement comes to our checking account.

    • Are you reimbursed after the fact?
      • Yes.

    • Do you have one  that you decided not to track in YNAB at all? Why?
      • We treat reimbursement as income.

    • What type of YNAB account did you set up for it (If you are using one) and why did you choose that option?
      • No dedicated account. As far as I understand, the nature of this FSA money is my deferred income, and behaves just like my other pay checks, from employer to my checking account.
  • ErinErin Posts: 1,377Member, Moderator, Administrator, YNAB Team, Beta Tester
    This is super helpful folks!  Keep it coming!  I'd love to hear more from others.
  • MalisaMalisa Posts: 6,140Member, Moderator, YNAB Team, Beta Tester
    @wedjan245  Are all the FSA funds available at the start of the plan year? Example: Our plan year runs 7/1 - 6/30. Since we're teachers, we'll get our first paycheck of that year on 8/30. On 8/30 they'll have only taken 10% of my annual amount, but if I send in receipts for the whole annual amount, they'll reimburse the whole annual amount. 

    Mine is just like yours. 
    I've done it where I don't run an account. However, I've also 'lost' some money for not using it up, so I prefer having an account so the amount that I have to be sure to spend is in my face. I didn't have one last year, but I've got one this year and I'm going to do an account. I haven't decided on specifics yet though. 
  • wedjan245wedjan245 Posts: 1,045Member
    @Malisa

    Here are more details that my FSA works.

    For medical FSA, there is a $2500 limit on contribution. This limit is so low that we ran out of it pretty much in 6 to 9 months. The reimbursement, managed by insurance company, came automatically in full when doctors file claims to insurance, even though the contribution was not made in full yet at the time.

    For dependent care FSA. We use up the $5000 contribution limit in less than 6 months on kids' daycare and after-school. We file in the first several months, and the reimbursement came twice a month in a fixed amount of $208 over the whole year, just like a regular income.

    Isn't it confusing? I don't understand why two accounts operate differently either.
  • wexworthwexworth Posts: 7Member
    Here is my input for our HSA.

    • Are deposits to your HSA/FSA made before you are paid?
      They show up on the same day.  I don't know about down to the hour or anything - I don't track it that closely.
    • Do you spend directly from the HSA/FSA account?
      Yes, I can either use a debit card or I can actually pay the provider directly from the HSA website by choosing a particular charge to pay (all the insurance submissions show up in the HSA account online).
    • Are you reimbursed after the fact?
      I don't do it that way, but you have the option.  If you go to the website you can either choose to pay a charge directly to the provider or have the money sent to yourself.
    • Do you have one  that you decided not to track in YNAB at all? Why?
      No
    • What type of YNAB account did you set up for it (If you are using one) and why did you choose that option?
      I set it up as a checking account, because that's how ours works.  It's exactly like our checking account except that it's pre-tax dollars that can only be spent on healthcare expenses.

      Additional note: I just use the scheduled transaction function to automatically enter the HSA deposits as income on each payday since it's always the same amount.  It's a much faster, easier way to track the balance than going to the website all the time.  This overall approach is probably more helpful for an HSA than an FSA since an HSA can carry a balance from year to year.  If we had an FSA, I might handle this differently to make sure I used up the balance every year.
    ImprovDebi
  • MrMcLargeHugeMrMcLargeHuge Posts: 128Member
    edited July 2013
    • Are deposits to your HSA/FSA made before you are paid?
      • No, I buy health insurance on my own, and my HSA deposits are made post-tax, transferred in from my Checking account.
    • Do you spend directly from the HSA/FSA account?
      • Yes, with a debit card tied to it
    • Are you reimbursed after the fact?
      • No, because I can just use the debit card directly tied to the HSA
    • Do you have one  that you decided not to track in YNAB at all? Why?
      • No, I track all my accounts in YNAB, even investment accounts
    • What type of YNAB account did you set up for it (If you are using one) and why did you choose that option?
      • I set it up as an off-budget checking account. For most purposes, it functions the same way, including the debit card and check-writing ability. However, I will soon reach the threshold that will allow me to start investing the funds, so that might be tricky. Most likely I will just use the Adjustment feature at the beginning of each month.
    Post edited by MrMcLargeHuge on
  • MayflyMayfly Posts: 219Member
    edited July 2013
    Are deposits to your HSA/FSA made before you are paid? 
    • Yes - I have both a health FSA and a dependent care FSA. Both allotments are pre-tax and come out before I am paid. 

    Do you spend directly from the HSA/FSA account? 
    • No. I (generally) put expenditures on the credit cards I pay off monthly and am reimbursed by direct deposit to my checking account.
     
    Are you reimbursed after the fact? 
    • Yes. 

    Do you have one that you decided not to track in YNAB at all? Why? 
    • Yes. I don't track either account in YNAB. I put my expenditures into the appropriate account. I attribute my spending to the specific categories (e.g., "Doctor" for co-pays and other visit-related expenses, "Prescriptions, etc." for other covered health expenses, "Child - Activities" for covered dependent expenses. When I'm reimbursed, I assign it to income in my checking account that I use to pay off the credit cards I use for monthly expenditures. That way I can accurately track my spending in each category. 

    What type of YNAB account did you set up for it (If you are using one) and why did you choose that option? 
    • N/A
    Post edited by Mayfly on
  • sarhamsarham Posts: 262Member
    edited July 2013
    Hi Erin,

    I would suggest another question, 'Do you have an HSA or an FSA?' Since these accounts are treated a little differently (different max contribution limits, different use it or lose it rules), they might be handled a little differently by the user. Also, is it assumed that these accounts are US specific, or are there different applications in other countries?

     

    *Do you have an HSA or an FSA?HSA (I have used both over the last few years of job changes)

     

    *Are deposits to your HSA/FSA made before you are paid?Pre-tax deductions made on payday.

     

    *Do you spend directly from the HSA/FSA account?Yes, I have a debit card tied to the account.

     

    *Are you reimbursed after the fact?I can be, if I choose not to use my associated debit card. (I also can go to the website and direct payments to the provider or myself.) HSA also lets you retroactively reimburse, so that may come into play at the end of the year.

     

    *Do you have one that you decided not to track in YNAB at all? Why?I have not ever tracked my HSA or FSA accounts in YNAB. Because the account is category specific, and the contributions come out of my paycheck as deductions (which I don't track), it never occurred to me to track the account in YNAB. And I haven't been interested in having that account balance be a part of my net worth calculation (same reason that I don't track my mortgage acct). But after reading a handful of forum posts over the last week, I think I have changed my mind, and I might even go back and track from the beginning of the account (about 9 months worth) since the balance and transactions over the year are important.

     

     

    *What type of YNAB account did you set up for it (If you are using one) and why did you choose that option?I plan to set it up as an off-budget account, since I don't want to track the contributions as income, and the account balance will always equal the "category" balance.

     

    My employer grants an interest-free 'advance' as needed until my contributions catch up with my expenses, so I am able to use my full contribution amount on the first day of the year. My contribution total won't change for the entire year, so I need to play around with YNAB to see if I need to enter that in some way or maybe just name the contribution total in the account. Or maybe I won't need to track that, since my balance could theoretically grow each year, as HSAs let you roll over balance (not use-it-or-lose-it situations). Right now, because I have spent more than I have contributed, I am guessing that my account balance would be negative, in the amount that I "owe" to the advance account. But as I said, I need to play with it, since I haven't actually applied these speculations yet.

     

    ETA: sorry for the readability issues. My work computer has issues with forms.

    Post edited by sarham on
  • LarryinLALarryinLA Posts: 296Member
    We have a Dependent Care FSA (DCFSA) and a health care FSA (HCFSA).  They operate differently.
    Are deposits to your HSA/FSA made before you are paid?The HCFSA is fully funded at the beginning of the year.  
    The DCFSA is funded monthly with the last month's payroll contributions (which are deducted weekly).  
    Do you spend directly from the HSA/FSA account?The HCFSA is linked to a debit card that is usable only for co-pays and prescriptions.
    The DCFSA cannot be spent directly.
    Are you reimbursed after the fact?Yes, both the HCFSA and DCFSA reimburse via direct deposit into my checking after submitting claims via fax.
    Do you have one  that you decided not to track in YNAB at all? Why?I do not track the DCFSA account in YNAB since the money transfers to my checking as soon as it funds the account.  I treat it the same as any other income.
    I do track the HCFSA in YNAB since I can spend directly from the account. and need to make sure I spend the money if it gets to the end of the year.  That's not a concern for the DCFSA.  We spend $5000 in child care by April.
    What type of YNAB account did you set up for it (If you are using one) and why did you choose that option?I have the HCFSA on budget since I can spend directly from it.  Until recently I had a category that I kept sync'd to the account balance, even though all spending from the account was categorized to medical.  Whenever spending or reimbursement occurred I moved the money from the HCFSA category to the medical category.  I realized this was not valuable, since YNAB doesn't care where the funds are if they are on budget.  If we ever actually underspent the FSA funds, then I'd have to figure out how to deal with that.
  • greymalkingreymalkin Posts: 287Member
    I'm a ditto to LarryInLA except that I don't yet track the HCFSA but I will soon, to make sure I don't forget to spend it all. I started a new job recently and haven't been in a hurry to deal with the HCFSA and DCFSA

    The DCFSA will either come in as a big chunk at the end of the year, or will be deposited in equal chunks, depending on whether I submit my bill before I've contributed everything (equal chunks deposited as Income every payday) or after (one huge chunk deposited as Income).
  • INAB26INAB26 Posts: 1,541Member, Beta Tester
    edited July 2013
    I had an FSA for several years. This year we were switched to an HSA. I've handled them completely differently.

    With the FSA, I only tracked it in a reimbursable category. Since the total amount was available at the beginning of the year no matter how much we'd actually put in through payroll deduction, and we had gotten quite good and guessing the right amount to contribute, I never felt a need to keep really close watch on available funds. I looked at our insurance website occasionally, categorized all eligible expenses to my Flex account category and all reimbursements (which were direct deposited to checking) back to the same category. I could not spend directly from that account so I just used a credit card and reimbursement was usually pretty prompt.

    The HSA is funded by both payroll deduction, and employer contribution. Being our first year and having way higher than normal medical expenses (terrible combination!), I've also had to make some deposits from our regular income. I have it set up as an off budget savings account. That way I can keep close track of the balance and record expenses and deposits, but I have no desire to jump through the matching up a budget category hoop so I don't try. I do spend directly from this account with a debit card.

    HTH!
    Post edited by INAB26 on
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