Understanding the Difference Between HSA and Flexible Spending Account

Health savings account (HSA) and flexible spending account (FSA) are both valuable tools to help individuals manage their healthcare expenses, but they have key differences that can impact your savings and financial planning.

An HSA is a savings account that allows you to set aside pre-tax funds for qualified medical expenses if you have a high-deductible health plan (HDHP). On the other hand, an FSA also allows you to save pre-tax money for medical expenses, but it is typically offered by your employer as part of your benefits package and does not require an HDHP.

Here are some key differences between HSA and FSA:

• Ownership: HSA is owned by the individual, meaning you keep the account and the funds even if you change jobs or health plans. FSA is tied to your employer, so you may lose the funds if you switch jobs.
• Contribution Limits: HSA typically allows higher contribution limits compared to FSA, giving you more flexibility in saving for future medical expenses.
• Rollover: With an HSA, the funds roll over from year to year, allowing you to build a substantial savings over time. FSA funds usually have a
  

  Health Savings Accounts (HSAs) are a fantastic way to manage healthcare costs, especially if you have a high-deductible health plan (HDHP). Unlike Flexible Spending Accounts (FSAs), HSAs not only provide tax benefits but also allow your funds to accumulate over time without the fear of losing them, making it easier to prepare for future medical expenses.