Health Savings or Flexible Spending Account

Health Savings Account (HSA)  dollars may be used for qualified medical expenses incurred by the account holder and dependents. According to IRS Section 213(d), “[an] expense has to be primarily for the prevention and alleviation of a physical or mental defect or illness.” In addition, COBRA premiums; health insurance premiums in conjunction with unemployment benefits; qualified long-term care premiums; and health insurance premiums paid by those over age 65 (other than for a Medicare supplemental policy) may be paid with HSA dollars.

Some examples of eligible expenses:

• Annual Physical Examination
• Birth Control
• Breast Pumps and Supplies
• Chiropractor
• Contacts
• Dental Treatment
• Eye exam and glasses
• Hospital Services
• Nursing Home
• Operations
• Psychologist and so much more….

Your  Health Care Reimbursement Flexible Spending Account (FSA) lets you pay for medical care expenses not covered by your insurance plan with pre-tax dollars. The expenses must be primarily to alleviate a physical or mental defect or illness, and be adequately substantiated by a medical practitioner. The products and services listed below are examples of medical expenses eligible for payment under your  FSA, to the extent that such services are not covered by your medical and dental insurance plan.

• Annual Physical Examination
• Birth Control
• Breast Pumps and Supplies
• Chiropractor
• Contacts
• Dental Treatment
• Eye Exam and glasses
• Hospital Services
• Nursing Home
• Operations
• Psychologist and so much more….

The first and foremost difference between the two is that FSA is a spending account while an HSA is a savings account. Whatever you contribute to the FSA needs to be spent in that year while HSA funds can be used anytime even after the year has ended. The FSA can be used for both medical and childcare expenses while the Health Savings Account is geared more towards medical expenses.

Determining which benefit to offer is a huge decision. Please contact us and  one of our experienced Employee Benefits Specialist will assist you in determining if and what type of plan is best for you and your employees.