What is the difference between an HSA and a FSA?

An HSA, or Health Savings Account, is a type of health insurance plan that allows the policyholder to set aside pre-tax money from their paycheck to be used tax-free for qualified medical expenses. An HSA is typically paired with a high-deductible health plan, meaning that the policyholder must pay a certain amount of out-of-pocket expenses before the insurance company pays for the remainder of the costs. A FSA, or Flexible Spending Account, is another type of health insurance plan in which policyholders set aside pre-tax money from their paycheck to be used tax-free for qualified medical expenses. The main difference between an HSA and a FSA is that FSAs typically do not require a high-deductible health plan, and there is a limit to how much can be withdrawn from the FSA in a given year. Additionally, the funds in an HSA roll over from year to year, whereas funds in a FSA must be used by the end of the plan year or are forfeited. In California, health insurance plans must abide by the California Insurance Code, which states that all health insurance policies must provide a minimum level of coverage. Individuals should review their health insurance plans and policies in order to determine which type of health insurance plan best suits their needs.

Related FAQs

How can I get health insurance?
What is the difference between an HMO & a PPO?
How can I reduce my health insurance costs?
How much does health insurance cost?
What is an annual maximum?
How does my age affect my health insurance premium?
What is a provider network?
What is a coinsurance rate?
What is an individual health insurance plan?
What is an out-of-pocket expense?

What is the difference between an HSA and a FSA?

Related FAQs

Related Blog Posts