A Flexible Spending Account (FSA) and a Health Savings Account (HSA) are both accounts that allow you to set aside pre-tax money to pay for eligible medical expenses. Here are some key differences between the two:
Flexible Spending Account (FSA)
- An FSA is an employee benefit that allows you to set aside money, on a pre-tax basis, for certain health care and dependent care expenses.
- You can only contribute to an FSA through your employer.
- You must use the funds in your FSA by the end of the plan year or you will lose them.
- You can use an FSA card to pay for eligible medical expenses.
Health Savings Account (HSA)
- An HSA is an investment account available only to members who are enrolled in a High Deductible Health Plan (HDHP) .
- You can contribute to an HSA on your own if you have an HSA-eligible health plan through work, spouses employer, private insurance, or the insurance marketplace.
- The funds in your HSA can be used to pay for eligible medical expenses tax-free, and any unused funds roll over from year to year.
- You can use an HSA card to pay for eligible medical expenses.
Its important to note that you cannot contribute to both an HSA and FSA account in the same year.
