What's the difference between FSA and HSA and which one is better?

Question

Flex Savings Account and Health Savings Account

Answer 1

Great question, while they seem at first glance to be the same thing- they are world aparts for the employee. FSA benefit the Employer, and HSA's benefit Employee's.

You see HSA accounts belong to the Individual whereas the FSA belongs to the employer. An Example will probably help in explaining;
a. John Smith has a FSA account during the year he is given $500. flex dollars to use toward medical expenses- John spends only $100.00 during 2006, in 2007 he still only has 500 flex dollars to spend. Lets say John quits during 2007, he does not take any of his flex money with him:(
b. John Taylor has a HSA account during the year he is given $500. HSA dollars which are deposited into his account he uses $100.00 for medical expenses during 2006, in 2007 he is given another $500.00 now "his account" has accumulated to $900. plus any interest that he has earned will be paid "with no federal income tax". Now here is the incredible part for employee's, lets say John quits in 2007 he still keeps all his money in his HSA, these are 100% portable, and are perfect for every single American.

Answer 2

HSAs are waaaay better.

In an FSA you have to carefully budget....because it is use it or lose it every year.

An HSA rolls over from year to year and from employer to employer.

Both take advantage of tax laws.

But here is the great thing about HSAs. The money goes in pre tax (from your contribution) or tax free from your employer. The money grows tax free (you can invest it in pretty much anything) and when you turn 65 you can convert it to a regular retirement income account and pay only your post retirement tax bracket rate on the money.

Answer 3

A fact seeker is a lover of understanding even with the undeniable fact that no longer each and every thing that a fact seeker says could be favourite by employing everybody. it is not very practically theories by using fact lots of the recommendations of philosophers are utilized everywhere. A scientist reveals ideas to the clever problems in existence yet they are by no potential somewhat after understanding, merely ideas to problems. edit/: and approximately morals, i think of that scientists tend to entice back from it. I advise, a scientist discovered nuclear ability which replaced into supposedly (or certainly) for use for solid. yet we, the clientele or maybe different scientists, grew to become it right into a weapon for mass destruction. Scientists can speculate all they desire approximately morals, and probably they may be top, yet while it includes their interest, it (morals) won't be of their palms by using fact it is not merely them who could use in spite of that's they invented.