Is Health FSP the Same as HSA? Exploring the Key Differences

Health FSP (Flexible Spending Plan) and HSA (Health Savings Account) are both tools that allow you to save money for medical expenses, but they have key differences that set them apart.

Health FSP:

• Requires you to use the funds within the plan year or lose them
• Funded by pre-tax salary deductions set by you and your employer
• Can be used for copays, deductibles, and other qualified medical expenses

HSA:

• Allows you to roll over funds year after year
• You own the account, and it is portable if you change jobs
• You can invest the funds for potential growth
• Requires a high-deductible health plan (HDHP)

While both options help you save on medical costs, the flexibility and long-term benefits of an HSA make it a more versatile and beneficial choice for many individuals.

Health FSP (Flexible Spending Plan) and HSA (Health Savings Account) are both excellent tools for managing medical expenses, but they cater to different needs. One of the main differences is that while Health FSP funds must be used within the plan year or risk losing them, HSAs allow you to carry over unused balances into the following year, providing more flexibility and financial security.