What are HSA and FSA? Understanding Health Savings Accounts and Flexible Spending Accounts

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are two common tools that help individuals save money for medical expenses while providing valuable tax advantages. Both accounts can help you cover healthcare costs, but they work in slightly different ways.

Health Savings Account (HSA):

• Available to individuals with high deductible health plans.
• Contributions are tax-deductible and grow tax-free.
• Withdrawals for qualified medical expenses are tax-free.
• Unused funds roll over year to year.

Flexible Spending Account (FSA):

• Employer-sponsored benefit that allows you to contribute pre-tax dollars.
• Use funds for eligible medical expenses, dependent care, or commuting costs.
• Usually have a