HSA vs. flexible spending account

**disneysteve** · 07-16-2020, 08:04 AM

An HSA is much different, and much better, than an FSA. The number one difference is exactly what you said: the FSA is use it or lose it. You could put money in at the start of the year, not spend it, and it's gone 12/31. And FSA is good if you have regular, predictable, recurring medical expenses as it allows you to pay for them pre-tax.

An HSA also lets you do that but the money you don't spend each year remains in the account. You don't lose it. That means you can contribute to it each year and build up a fund that you'll have for whenever a medical expense does occur in the future. If by the time you retire, you haven't used the money, it then becomes another retirement account.

An HSA has to be paired with a high deductible insurance plan but HSA money can be used to pay expenses along the way while you are still meeting your deductible.

**cypher1** · 07-16-2020, 09:25 AM

HSA all the way, if you can. Depending on your regular medical expenses, or if other family members need to go to doctors a lot, I'd take over an FSA. When I left my previous employer I took my older HSA balance with me, and used while banking my current one. I still keep about 2000 for emergency (1500 is my deductible), so its still primarily for expenses first, and investment secondary, which is doing great.

**Like2Plan** · 07-16-2020, 10:14 AM

Originally posted by Goldy1 View Post

Can someone explain what all the rage is about health savings accounts? My husband got a new job a few months ago. I think we have a flexible savings account. It's use it or lose it at the end of the year. I read about investing many years ago before kids too so much of my time and interest, and am now interested in learning again.

I have been reading another forum, and they talk about HSA a lot. They say to max them. I don't even think we have access to a HSA. I can't tell if it's the same as a flex.

I didn't see the point in the flex account for us. Our health expenses are relatively low...thankfully so far. My dh wears glasses. I take one cheap prescription with a low copay for my blood pressure(hereditary..I am fit, super healthy lifestyle, all other labs perfect so far)

As Disneysteve mentioned, the HSA is paired with a high deductible medical insurance plan. It is possible to have a HSA and a limited purpose FSA, but the LPFSA in this situation is limited to eligible vision and dental expenses. If the HD medical insurance works out best for you, then the HSA is really a great tool.

DH and I don't have a HD medical insurance plan, so we can only sign up for the FSA. Some years (thankfully) we don't have very many eligible FSA expenses and then it becomes a challenge to use the funds before the end of the year. But, if you can figure it right it is a great savings because it is pretax (including no FICA tax). The past 2 years, we have used all our FSA $$ before July (dental work-yikes! ). This year when Covid -19 hit they changed the FSA eligible expenses to include OTC drugs and a lot of other stuff--so you should take a peek at the list.

**Goldy1** · 07-20-2020, 06:50 AM

ok. I kept reading how a good thing HSA was if you are saving a bit for retirement. It appears my husband only have a flex..use it or lose it, Our PPO health insurance from his employer has an option of 1 grand or 2 grand deducible so I don't think that is a high deductable by that definition.

I had googles the difference between the two programs but wasn't sure if the flex was really an HSA and I wasn't understanding it.

HSA vs. flexible spending account