What’s the Difference
Between an HSA and an FSA?
A Health Savings Account (HSA) or Flexible Spending Account (FSA) can be a vital part of minimizing your medical and eyecare expenses every year. Both types of accounts can be extremely useful, but there are some important limitations and differences between the two that you should understand before making the decision to use one or the other.
At Willow Creek Eyecare by PersonalEyes, we’re happy to help you understand how these accounts work, so you can take full advantage of them for your family’s health.
What Is an HSA?
A health savings account (HSA) allows you to put pre-tax money into it and use those funds as you choose on eligible health-related expenses, such as an eye exam or new eyeglasses. An HSA is typically only an option for people with High Deductible Health Plans (HDHPs).
Some of the key components of an HSA that make it unique are:
- Your HSA funds usually roll over from year to year, meaning you can save them up
- A higher “contribution cap” allows you to hold more funding in the account at once
- Your HSA doesn’t require employer involvement
People often choose higher deductible plans because the monthly premiums are lower. An HSA is a good supplement to that because you can help cover out-of-pocket expenses within your deductible with HSA funds.
What Is an FSA?
A flexible spending account (FSA) operates the same way as an HSA: any money you spend on eligible healthcare expenses from an FSA won’t be taxed.
However, there are some key differences.
- The money in an FSA expires at the end of the year. You have to use it by the end of the year (unless your plan includes an exception), or it disappears
- You can store less money in an FSA than an HSA but your employer may match your contribution
- Usually only offered by employers, alongside or in lieu of employer health insurance plans
An FSA makes a lot of sense for a variety of people, but there’s an issue: if you overestimate the amount of money you need to cover your expenses, there may be some left over at the end of the year.
Use Your FSA at Willow Creek Eyecare
Because your FSA funds run out in the new year, it’s helpful to have a “use it or lose it” mindset about your FSA when October, November, and December roll around each year. Look at your remaining funds and consider quality ways to spend them.
The place to come with these year-end funds is Willow Creek Eyecare. Our comprehensive eye exams, and a fresh prescription for new glasses or contacts, are a great way to finish out your year. We can fit you in stylish frames from Ray-Ban, Maui Jim, Oakley, and more, and help you use your remaining FSA dollars on quality and style.
Call us today at 503-610-4318 to learn how you can use your FSA funds on great vision care.