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FSA vs. HSA

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What is an FSA?

 

  • Used to pay for medical expenses not paid for by insurance for example this deductibles, copayments, and coinsurance
  • Can also be used for qualified medical expense, such as dental and vision expenses and over the counter drugs
  • “Use it or lose it”  money must be spent by the end of the year or the money is lost

 

Healthcare Reform Impact on FSAs

  • Beginning in January 2011 over the counter drugs will require a prescription in order to be FSA eligible such as Advil
  • Beginning in January 2013 a new maximum dollars allowed into account beginning in 2013 of $2500

 

What is an HSA?

  • Must also be enrolled in a high deductible health plan
  • Unlike a FSA the funds roll over year to year if not spent.
  • Account is owned by the individual
  • may be used for any qualified medical expense.

 

Healthcare reform impacts on HSAs

  • Beginning in January 2011 – over the counter drugs will require a prescription in order to be FSA eligible such as Advil
  • Beginning in 2011, non qualified expenses will have a higher tax penalty. In 2011 the penalty moves from 10% to 20%  

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