FSA vs. HSA
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%