9 ways to use your HSA or FSA you may not know about:

Home / Insurance / The difference between HSAs and FSAs (plus 9 ways to use them)

By Clark Howard Staff, Wednesday, December 16 th 2015

In 2016 – Learn More about the Upcoming CONCIERGE MEDICINE ASSEMBLY …

DECEMBER/JANUARY 2016 – Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are increasingly popular due to the changes in healthcare over the last several years.

Both accounts allow participants to use tax-free dollars to spend on healthcare need, but there are some differences between an HSA and an FSA. Most notably, HSA funds roll over and accumulate year after year if they are not spent, and they are owned by the individual. (Another choice, Health Reimbursement Arrangements, are owned by employers.)

HSAs Give Employees Incentives To Adopt Financially Healthier Behaviors

HSAs are really awesome for some people – you can use them to pay for qualified medical expenses at any time without paying taxes or penalties! However, if you see a doctor frequently, HSAs are probably not the best choice for you — since high-deductible health plans are typically required to be eligible for an HSA.

What’s the difference between an HSA and an FSA?

There are pros and cons to HSAs and FSAs. Below is a very helpful chart from Nerdwallet:

	Health savings account (HSA)	Flexible spending account (FSA)
Eligibility requirements	Eligibility requirements include having a high-deductible health plan (HDHP)	No eligibility requirements
Contribution limit	2015 contributions capped at $3,350 for individuals or $6,650 for families	2015 contributions capped at $2,550
Changing contribution amount	You can change how much you contribute to the account at any point during the year.	Contribution amounts can be adjusted only at open enrollment or with a change in employment or family status.
Rollover	Unused balances roll over into the next year.	With a few exceptions, FSAs are “use it or lose it,” and you forfeit any unused balance.
Connection to employer	Your HSA can follow you as you change employment.	In most cases, you’ll lose your FSA with a job change. One exception: if you’re eligible for FSA continuation through COBRA.
Effect on taxes	Contributions are tax-deductible, but can also be taken out of your pay pretax. Growth and distributions are tax-free.	Contributions are pretax, and distributions are untaxed.

There are some great ways you can use your HSA or FSA that you may not know about. Below are some ideas!

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