Smart Saving with a HSA & FSA
It’s that time of year again when employers are busy preparing to roll out their open enrollment materials for next year. To those not closely involved with health insurance on a daily basis, it can feel like alphabet soup when you come across things like HSA and FSA. Here is an explanation in simple terms:
A Health Savings Account (HSA) is a personal bank account that you can use to pay for health care expenses with tax-free dollars. You can use HSA dollars to pay for any eligible expense for you and your family. And you don’t lose the money at the end of the year! The money just rolls over to the next year. Even if you leave your employer, the money is yours because it is a personal bank account.
A Flexible Spending Account (FSA) is an account you can open through your employer, add money to pre-tax, and then spend on eligible health care expenses. The account is tax-free, so you can save up to 25% or more on eligible health care expenses throughout the plan year!
Setting aside money for health care expenses is a smart move. Keep in mind that HSAs are only available to those with High Deductible Health Plans (HDHPs). Talk to your Human Resources Department to answer your questions.