Health savings accounts: Is an HSA right for you?
Are health savings accounts similar to flexible spending accounts?
Content
Why were health savings accounts created?
Is a health savings account right for me?
What are some potential advantages of health savings accounts?
What are some potential disadvantages to health savings accounts?
Who can set up a health savings account?
What is a high-deductible health plan and how does it work?
How much money can I deposit annually into a health savings account?
Can my employer contribute to my health savings account, too?
Are health savings accounts similar to flexible spending accounts (FSAs)?
How do I find information about medical costs and quality so that I can make informed choices?
Can I withdraw money from a health savings account for nonmedical expenses?
Are health savings accounts similar to flexible spending accounts (FSAs)?
Yes, but there are a couple of key differences. One difference is the amount of unspent money you're allowed to roll over each year.
An HSA allows you to roll over the entire unspent amount. For an FSA, recent rules allow you to roll over a maximum of $550 a year if your employer chooses to offer the option. Or your employer may choose to provide a grace period at the end of the year, in which you can use unspent money for up to two and a half months after the plan year ends.
Another difference is that the money you put into an HSA is yours and you can take it with you if you switch jobs or retire. You can't take money from an employer-sponsored FSA with you if you change jobs or retire.
Finally, it's important to know that in most cases you can't have both an HSA and an FSA.
