What is the difference between an HSA and a FSA?

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are both types of savings accounts that are used to help cover medical costs in Virginia. The main difference between the two is the way the funds are used and the way the money is taxed. An HSA is a tax-advantaged health savings account that typically comes with a high-deductible health plan. This type of plan is funded with pre-tax dollars. This means that the money you contribute to the account is not taxed by the IRS. These funds can be used to cover qualified medical expenses such as doctor visits, prescription drugs, and other healthcare costs. A FSA, on the other hand, is a flexible spending account that allows you to set aside money from each paycheck that is not subject to taxes. This money is set aside to cover health related expenses such as deductibles, co-pays, and prescription drugs. However, these funds must be use by the end of the plan year or they will be forfeited. Additionally, the funds in an FSA are not eligible to be rolled over to the next year like an HSA. Overall, both HSAs and FSAs are excellent ways to save for medical expenses in Virginia. Both provide a tax advantage and can help you save money on medical costs. However, it is important to understand the differences between the two before choosing which one is best for you.

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What is the difference between an HSA and a FSA?

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