Are CGMs like Dexcom or Libre FSA/HSA eligible?

Yes. Continuous glucose monitors (CGMs) and their replacement sensors are fully eligible expenses for both FSA and HSA accounts.

Can I have both an FSA and an HSA?

Generally no — you cannot contribute to both simultaneously. However, a Limited-Purpose FSA (covering only dental and vision) is allowed alongside an HSA.

What happens to unused FSA funds at year-end?

Unused FSA funds are forfeited unless your employer offers a rollover option (up to $640 in 2024) or a 2.5-month grace period. Plan contributions carefully based on predictable diabetes costs.

Does an HSA investment grow tax-free?

Yes. Once your HSA balance exceeds the minimum threshold (usually $1,000–$2,000), most providers allow you to invest in mutual funds. All growth is tax-free when used for medical expenses.

Can I use FSA or HSA for a diabetes education program?

Yes. IRS-approved Diabetes Self-Management Education and Support (DSMES) programs are eligible expenses under both FSA and HSA accounts.

What if I buy diabetes supplies without using FSA/HSA funds?

You miss out on significant tax savings. At a 25% tax bracket, every $1,000 spent on supplies costs $250 more than if paid through an FSA or HSA. Always use tax-advantaged funds when possible.

Are MDS Diabetes products FSA/HSA eligible?

Many products available at mdsdiabetes.com — including test strips, lancets, CGM accessories, and insulin pen needles — are FSA/HSA eligible. Check individual product listings for eligibility confirmation.

FSA vs HSA for Diabetes: Which Saves More?

Quick specs

FSA 2024 Limit	$3,200
HSA 2024 Individual Limit	$4,150
HSA 2024 Family Limit	$8,300
FSA Rollover Max	$640
HSA Rollover	Unlimited
HSA Requirement	High-Deductible Health Plan (HDHP)
Estimated Annual Tax Savings	$500–$2,000+

Key Takeaways

HSAs offer triple tax advantages and unused funds roll over indefinitely
FSAs provide immediate access to funds but have a use-it-or-lose-it rule
People with diabetes typically save $500–$2,000+ annually using either account
HSAs require a High-Deductible Health Plan (HDHP); FSAs do not
Both accounts cover insulin, CGMs, test strips, and other diabetes supplies

Overview

Managing diabetes involves significant ongoing costs — insulin, continuous glucose monitors (CGMs), test strips, medications, and specialist visits. Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) are IRS-approved tax-advantaged accounts that can dramatically reduce these out-of-pocket expenses. Choosing the right account depends on your health plan, income, and spending patterns.

FSA vs HSA: Key Differences

Feature	FSA	HSA
Eligibility	Any employer plan	HDHP required
2024 Contribution Limit	$3,200	$4,150 (individual) / $8,300 (family)
Rollover	Up to $640 or grace period	Unlimited
Tax Benefit	Pre-tax contributions	Triple tax-free
Investment Option	No	Yes
Portability	Employer-tied	Fully portable

What Diabetes Expenses Are Covered?

Both FSA and HSA funds can be used for a wide range of diabetes-related expenses:

Insulin and insulin pumps
Continuous glucose monitors (CGMs) and sensors
Blood glucose meters and test strips
Lancets and lancing devices
Prescription medications (Metformin, GLP-1 agonists, etc.)
Diabetes education programs (DSMES)
Endocrinologist and dietitian visits

Which Saves More for People with Diabetes?

HSA: Better for Long-Term Savers

The HSA's triple tax advantage — pre-tax contributions, tax-free growth, and tax-free withdrawals for medical expenses — makes it the superior long-term vehicle. Unused funds compound over time, creating a medical nest egg. For a person with Type 1 diabetes spending $3,000/year on supplies, an HSA could save $750–$1,050 in taxes annually (at 25–35% bracket), plus investment gains.

FSA: Better for Immediate, High Costs

FSAs front-load your full elected amount on January 1st, making them ideal if you face large diabetes costs early in the year (e.g., pump upgrades, surgery). Someone who needs $3,200 in CGM sensors in Q1 can access all FSA funds immediately, even before payroll deductions are complete.

Actionable Advice for Diabetics

On an HDHP? Choose HSA — maximize contributions and invest surplus funds
On a traditional plan? Use FSA and spend it strategically on predictable costs like MDS Diabetes supplies
High annual costs? Contribute the maximum to either account each year
Newly diagnosed? FSA offers immediate access; transition to HSA as you stabilize costs

Shop Eligible Diabetes Supplies

MDS Diabetes (mdsdiabetes.com) offers a wide range of FSA- and HSA-eligible diabetes supplies including CGM sensors, test strips, insulin pen needles, and lancets. Using your tax-advantaged funds on MDS Diabetes products maximizes your savings while ensuring you have reliable, high-quality supplies year-round.

References & Sources

Worth it if you…

✓Both accounts cover all major diabetes supplies and medications

✓HSA provides triple tax advantage with unlimited rollover and investment growth

✓FSA allows immediate access to full annual funds from January 1st

Watch out if you…

△FSA funds expire annually with limited rollover, risking lost savings

△HSA requires enrollment in a High-Deductible Health Plan, which may increase upfront costs

Frequently asked questions

Yes. Insulin is a qualified medical expense under both FSA and HSA accounts, including all types — rapid-acting, long-acting, and inhaled insulin.

Editorial note

This article is for educational purposes only and does not constitute medical advice. Always consult your healthcare provider before making changes to your diabetes management. Last reviewed: July 5, 2026 by the MDS Diabetes editorial team.

What to do next

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FSA vs HSA for diabetes: which saves more?