HSA vs. FSA: Understanding the Key Differences

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are both valuable tools for managing healthcare expenses, but they have some key differences that set them apart.

One of the main differences between an HSA and an FSA is that an HSA is a savings account that you own and control, whereas an FSA is an account set up by your employer. Here are some more differences to help you understand the distinctions between the two:

• HSAs:
• Available to individuals with a high-deductible health plan
• Contributions are tax-deductible
• Unused funds roll over from year to year
• Portable and not tied to a specific employer
• FSAs:
• Available through employer-sponsored plans
• Contributions are pre-tax and can be used for eligible medical expenses
• May have a
  

  Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are both designed to help you manage your healthcare costs, yet they are structured differently in several key areas. For instance, while an HSA requires you to be enrolled in a high-deductible health plan (HDHP), an FSA does not have this requirement, making HSAs a great choice for those looking for long-term savings opportunities.