How to use your FSA when healthcare gets more expensive

Claire Baker
Sep 6
2 min read

The cost of health insurance is going up even more in 2026. Here’s something you can do to protect your wallet (and a secret hack that your employer doesn’t want you to know at the end).

Insurance premiums have been increasing at more than double the rate of inflation for the past 3 years. In 2026, employer group plans are expected to increase nearly 8%.

Hyperinflation in the cost of health insurance is going to fundamentally change how employers structure their benefits offerings. Expect a larger portion of the cost to be foisted to the employee through:

🤏 Employers covering a smaller portion of premiums for both the employee and their family.

🗜️Weaker plans with higher out-of-pocket costs every time you go to the doctor.

😮‍💨 More investment in flex benefits that subsidize the cost of healthcare in other ways.

It’s time to learn how to use your FSA.

In 2026, the FSA contribution limit is going to increase by 50% from $2,500 to $3,750 for an individual and $5,000 to $7,500 for a family.

Here’s how to think about it:

✂️ It’s like a 35% coupon

You would have to earn $5,769 to get $3,750 worth of healthcare if you didn’t use your FSA. That’s $2,019 of savings.

If you have a family, you’d have to earn $11,538 for $7,500 of healthcare after tax. Save yourself the $4,038.

💸 You were going to pay it anyway.

Many of us can anticipate some of our heathcare costs. Prescriptions, therapy, contact lenses, allergy meds, Advil.

A $12 tube of Neosporin costs you $18.46 of gross income if you buy it with post-tax dollars. A $150 therapist’s visit would cost $230.

If you were going to buy it anyway, you might as well not pay taxes on it.

🤕 Plan for your “One Big Thing”

An FSA is just a different way to protect yourself from risk. Pre-fund your FSA to lock in your discount for that one Urgent Care visit, sports injury, root canal, or smashed pair of glasses that comes up every year or so.

💰 Overfund? No problem.

If that One Big Thing doesn’t happen this year, you can roll over some of what’s left over and contribute that much less next year to maintain the same cushion.

🛒 Use it or lose it? Just use it.

If you wind up having extra money at the end of the year, stock up on supplies for next year. Or use it to get the care you’ve been putting off.

Buy that extra pair of glasses. Get that marriage counseling session. Finally see the chiropractor. Or get a lifetime supply of sunscreen in December while it’s on sale.

🤫 The secret hack.

If you front-load your medical expenses at the beginning of the year and then you leave your job before the account is fully funded, most plans don’t require you to pay it back.

But I didn’t tell you that.

Don't understand why your benefits are like that? Have a question on how to use your insurance? Email us. We'd be happy to answer your questions.

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