« Health Savings Accounts Save Money with Low-cost Health Insurance | Main | Health Savings Accounts Can Lower Insurance Premiums »
February 20, 2010
Is a Flexible Spending Account as Good as a Health Savings Account?
While Flexible Spending Accounts and Health Savings Accounts have some similarities, they also have important differences. Health Savings Accounts offer greater control, and more benefits.
While you own and control your Health Savings Account, a Flexible Spending Account is controlled by your employer. That means you lose all the money in your Flexible Spending Account if you leave that employer, but you can keep your investment in your Health Savings Account if you change jobs, become unemployed, or retire.
Money you deposit into your Health Savings Account is tax-deductible, and you decide how to invest it. The interest earned is tax-free while kept in the account, and the interest is not taxed when used to pay for healthcare expenses. Flexible Spending Accounts do not earn interest.
Withdrawals from your Health Savings Account used to pay for qualified medical expenses are also tax-free, and can be used for any healthcare related expenses, including health insurance co-pays and non-prescription medications. If you don’t spend the money you contribute to a Flexible Spending Account each year, you lose it at the end of the year. With Health Savings Accounts, all unused funds and interest are carried over from year to year.
At HSAforAmerica, we understand how HSA plans work, how much you can deposit, and how you can take advantage of these tax savings. We’ll explain your options, and help you find the best HSA plan to meet your needs with Health Savings Accounts.
Posted by Wiley Long at February 20, 2010 12:51 AM