How is an HSA like an FSA, and what are the differences between them?
• Both offer tax advantaged methods of paying for qualified health care expenses through payroll deductions per IRS regulations. Key Differences Include: • An HSA is a true savings account. The balance accrues across calendar years, can earn interest and is fully portable. Not taxed if used for qualified medical expenses per IRS definitions. Contribution amounts can be changed at any time. • An FSA is a calendar year payroll deduction contract. It cannot be changed unless a QLE occurs, and calendar year balances will be forfeited if expenses are not incurred and submitted for reimbursement and/or if an employee terminates employment. An FSA has the “use it or lose it clause”. Q: Do I lose the contributions in the account at the end of the year? A: No, unlike the Flex Spending Account, the HSA is a true savings account (usable for qualified medical expenses) that grows from year to year. Q: What happens to my HSA if I leave Macalester? A: The money in that account is yours to take with
Related Questions
- Im on the HDHP and participate in the Health Savings Account (HSA). Can I also participate in the Health Care Flexible Spending Account (FSA) through WageWorks?
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