I saw a blog today that reminded folks not to forget to take advantage of their employers FSAs which in turn reminded me of the confusion some folks seem to have between the two. While the money in them can be used for similar purposes there is a very distinct difference between a Flexible Spending Account (FSA) and a Health Savings Account(HSA). With an FSA, your employer owns it and with an HSA you own it.
BIG difference because at the end of the year, if you don’t spend all the money in your FSA (even if you put it in there yourself), your employer gets to keep it. With an HSA, if you don’t spend all the money by the end of the year (even if YOUR EMPLOYER put money into it), YOU get to keep it. This also means that if you change jobs, the money in your HSA stays with you. So it is one time when “you can take it with you.”
Another item worth noting is that the is a provision in place to help boost enrollment into HSAs that allows employers to make a one-time transfer of funds from an FSA into an individuals HSA. So, if your employer is shifting to HSAsor offering HSAs in addition to other insurance options, you should find out of you can take advantage of this one time opportunity.
Filed under: business, health, health & wellness, health insurance, healthcare, high deductible health plan, hsa education | Tagged: FSA, hsa education, hsa vs. fsa, what is an hsa
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