Video: HSA vs. FSA: which is for you?

HSA vs FSA: Which is Right for you?

1. When it comes to setting aside money to pay for out-of-pocket health care expenses,
2. you have a choice…
3. a Flexible Spending Account or a Health Savings Account.
4. Both options can be sponsored by your employer and may be administered by PayFlex.
5. The accounts are similar in some ways and different in others.
6. Both allow you to set aside pre-tax dollars each plan year to pay for eligible health care expenses.
7. Because you don’t pay taxes on this money, this can mean savings for you.
8. They both allow you to pay for out-of-pocket medical expenses during the plan year.
9. An important difference between an FSA and an HSA is whether you spend during the plan year or choose to save for the future.
10. The FSA is a spending account. You’re expected to spend the money you have set aside within the plan year.
11. FSA funds are “use it or lose it”. They do not roll over at the end of the plan year and would be forfeited.
12. On the other hand, the HSA is a savings account. You have the choice to save that money until you need it.
13. HSA funds roll over from year to year and earn interest.
14. Another important difference is that you have the opportunity to invest the money in your HSA.
15. HSA funds can be invested in various mutual funds, and accumulate tax free for future health care expenses.
16. To open an HSA, you must be enrolled in a qualified high deductible health plan. With the exception of some preventative services,
17. this plan means you pay for medical expenses out of pocket until your deductible is met.
18. If your employer allows, an FSA can be combined with an HSA, provided that the FSA is used for only dental and vision expenses.
19. This has been a brief summary of FSA’s and HSA’s.
20. Consider your options carefully and make the choice that’s right for you.