Difference Between FSA & HSA
How To Pay For Medical Expenses Without Paying Tax!
Two tax-free options exist to pay for health care expenses.
One is a Health Savings Account (HSA) and the other is a Flexible Spending Accounts (FSA).
What's the difference between an HSA and an FSA?
Structured in a similar way, both allow employers to contribute money - tax-free - to pay for health care expenses. The benefit to you is eligible medical expenses can be paid with this pre-tax income! We will break down the differences so that you can make an informed decision.
What Expenses Are Covered Under HSA and FSA?
Qualified medical expenses under HSA & FSA for diseases include:
Diagnosis
Cure
Mitigation
Treatment
Prevention
Anyone can set up and contribute to an HSA as long as their plan qualifies as a High Deductible Health Plan (HDHP) but only your employer can set up an FSA plan.
HSA
A single employee can save a maximum of $3,600 into an HSA, while a family can save $7,200 if they qualify with an HDHP.
Some states allow you to invest your HSA money into an interest bearing account, stocks or bonds and the interest is untaxed! The money must be spent on medical expenses.
You can change your HSA contributions at any time.
You own your HSA money and it rolls over from year to year. Some even use it as a retirement account!
You can reimburse yourself only after your contributions equal the expense.
FSA
A single employee can add up to $2,750 into an FSA and employers can match those contributions.
Totals contributed are set at the beginning and cannot be changed.
Employers own the money.
Money left in the account does not roll over to the next year.
Can be reimbursed immediately, even for expenses that exceed the amount currently in the account.
Schedule a free consultation with one of our professionals to find out which tax saving health plan best suits your needs.
