[GNC] flex card for medical expenses

[Kalpesh Patel]

I have setup a separate liability account called FSA -- similar to HSA -- in which paycheck deduction for it decreases the FSA account. As I pay cost such as co-pay or for meds, I increase that account against FSA and second leg it against proper expense account. If all goes well then FSA account should end up close to zero at the end of year. If there is a carryover than it continues following year, but if there is no carry over or lose some due to limits on carryover then I enter a transaction against retained earning account on Dec 31st to adjust out FSA account to have proper balance on Jan 1st. 

This works for me but accounting experts might weigh in if this is in any way not a normal way to capture it.

-----Original Message-----
From: David T. <sunfish62 at yahoo.com> 
Sent: Monday, May 25, 2026 12:12 AM
To: gnucash-user at gnucash.org; Lawrence Whalen <lwhalen26 at gmail.com>
Subject: Re: [GNC] flex card for medical expenses

Larry, 

That sounds a lot like a US Health Spending Account (HSA). With an HSA, a person chooses an amount that will be allocated for medical expenses the following year, and an amount is deducted from their paycheck over the year (pretax) to make up that amount. Originally, the money was lost if not spent at the end of the year, but at this time, some of that allocation can be carried over to subsequent years.

I have set up our HSA using a few accounts. There are annual accounts in equity and liability. At the beginning of the year, the full amount for the year (in your case, $600) is transferred from equity into the liability. The payroll deductions go into the liability account and reduce that balance ultimately to zero. Payments from the HSA provider go into the equity account until that account (ideally) reaches zero as well. 

I'm sure I'm missing tons here, but that's what I've got to offer. 

David T. 

On May 24, 2026 9:19:49 PM GMT+05:30, Lawrence Whalen <lwhalen26 at gmail.com> wrote:
>Hi,
>
>I'm hoping someone can give me some guidance on how to set up a medical 
>flex card that has a $600 limit, but has $50.00 deducted each month 
>from salary.
>
>The flex card full amount can be used at any time the deductions will 
>just keep going. If it is exceeded you have to pay out of pocket.
>
>I am trying to figure out accounts to set up and how to set a cap per 
>se that cannot be exceeded because once exceeded you can no longer use it.
>
>Thank you all for any help.
>
>Regards,
>
>Larry
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