What is the difference between an HSA and a FSA?

An HSA (Health Savings Account) and a FSA (Flexible Savings Account) are both types of health insurance plans that you can use to lower your out-of-pocket medical costs. However, each one works in a slightly different way. HSAs are tax-advantaged savings accounts in which you can put money that is then used to pay for eligible medical expenses. The money you put into an HSA is yours to keep and is also tax deductible. The money in an HSA can be used to pay for medical expenses such as doctor visits, prescriptions, and hospital stays. FSAs are also tax-advantaged accounts, but they work a bit differently than HSAs. They are essentially employer-sponsored accounts in which you can set aside pre-tax money to pay for eligible medical expenses. The money put into a FSA is not yours to keep, and it must be used within a certain time frame or it will be forfeited. So essentially, the main difference between an HSA and a FSA is that HSAs are individual accounts that you can use to save money, whereas FSAs are employer-sponsored accounts that you can use to set aside pre-tax money for medical expenses. Both are beneficial for helping to reduce the cost of healthcare, so it’s important to compare the two and see which one works best for your situation.

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What is the difference between an HSA and a FSA?

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