As health care expenses continue to increase, tax-advantaged health plans can be a cost-effective way to offset health care expenses. Two of the most popular – HSA and FSA. Both provide tax savings on health care costs and can make managing out-of-pocket health care expenses easier throughout the year. But who would win in a boxing match?
Let’s meet tonight’s matchup!
Fighting in this corner, a special type of bank account designed for individuals, enrolled in a High Deductible Health Plan (HDHP), to save and pay for qualified health care expenses, with the opportunity to save for the future, and the potential to be used as a powerful tool to diversify retirement portfolios. This contender also provides excellent tax benefits helping to make the most out of every health care dollar…it’s the Health Savings Account (HSA)!
And fighting in this corner, an account for employees to elect pre-taxed funds, up to the IRS annual maximum, to pay for qualified health care costs. Subject to certain rules with unspent funds at the end of the plan year its… the Flexible Spending Account (FSA)!
As Michael Buffer would say, “Let’s Get Ready to RUMBLE!” Let the 12 rounds begin!