Expert answers questions about health care spending accounts


The phrase “spend money to save money” didn’t refer to Flexible Spending Accounts, but it could have. By using a health care FSA, employees can save money for health and medical expenses not covered by insurance.

U-M offers faculty and staff the opportunity to pay for eligible health care expenses with pre-tax dollars using a health care FSA, which allows employees to have a set amount taken from their pay before taxes, which lowers their income tax.

The money goes into an account that can be used for eligible expenses, such as medical and prescription drug co-pays and approved over-the-counter products.

Enrollment in U-M’s FSAs continues through Dec. 31. Visit for more information.

Jeffrey Kullgren, associate professor of internal medicine, helped design a U-M poll that concluded most 50- to 80-year-old adults do not utilize tax-advantaged savings accounts. U-M employs more than 16,600 faculty and staff older than 50.

Although the poll examined utilization of all types of tax-advantage savings accounts, U-M’s benefits plan offers only FSAs.

Kullgren, a physician at Michigan Medicine and the VA Ann Arbor Healthcare System, explained why tax-advantage accounts are worth exploring.

How does a health care spending account save money?

Jeffrey Kullgren
Jeffrey Kullgren

Kullgren: There are different types of health care spending accounts, including Flexible Spending Accounts, Health Savings Accounts and Health Reimbursement Arrangements. While these accounts differ in their details, they all provide a tax-free way to pay for qualified medical expenses. For many people, these accounts not only help them pay less in taxes, but also ensure they are able to pay for future health care services.

Why aren’t adults older than 50 utilizing health care spending accounts?

Kullgren: In our survey, 40 percent of U.S. adults ages 50-80 told us they hadn’t saved for health care in the last year because they already had enough savings for care they might need. Less common reasons were not being able to afford saving (27 percent), not needing health care services (18 percent), and not having thought about saving for health care (13 percent). 

Are younger workers using health care spending accounts?

Kullgren: The National Poll on Healthy Aging collects data from U.S. adults ages 50-80. Therefore, we weren’t able to compare whether younger workers are using health care spending accounts differently than older workers. Our other research suggests that many individuals with high cost-sharing for their care, regardless of age, may be missing opportunities to save for health care expenses.

What should be considered before enrolling in a health care FSA?

Kullgren: Access to the different types of health care spending accounts can depend on where you get your health insurance and what type of health plan you have. It’s important to know which accounts you have access to and what health care you may need in the next year so you can make the best decision.



  1. Jie Li
    on November 17, 2021 at 12:48 pm

    I really want to use FSA but in the past few years it has become such a pain to get reimbursed that I chose not to put any money there. Please see the attached emails for more details

    Hi Jie,
    Thank You for forwarding the link to the BBB webpage discussing complaints against PayFlex. I regret the handing of your PayFlex account has caused you frustration. May I ask what specific issues you are having with this company?

    Thank You,

    On Wed, Sep 22, 2021 at 5:09 PM Jie Li wrote:
    Dear Sarah, Thank you for reaching out to me!

    I have been frustrated and outraged by payflex being a source of headaches and a significant time sink. The problem started about three years ago and is getting worse. See many serious complaints here, which I resonate. I hope that the university can help improve the situation or offer an alternative to this FSA benefit.

    Best, Jie Li

    On Sep 22, 2021, at 4:11 PM, Sarah Dani wrote:

    Hello Jie Li,
    I am following up to your FSA ticket regarding a complaint. So I can better assist you, what issue(s) are you experiencing with PayFlex?

    Please let me know.

    Thank you,

    Sarah Dani
    Benefits Admin. Senior
    Benefits Administration Office
    University of Michigan

  2. Marian Jimenez
    on November 17, 2021 at 6:35 pm

    I have utilized this a lot. Only thing is you lose what you dont use per year. It does not roll over. I will plan on something like new eyeglasses or dental work. If you do not use the amount you put in there you lose it.In my previous employer and also heard from others, Health Equity is much better option.

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