Healthcare answers in 60 seconds.
What's the difference between a flexible spending account and a health savings account?
FSA's and HSAs are pre-tax accounts you can use to pay for healthcare related expenses. To qualify for an HSA you must have a high deductible health plan. With both FSA's and HSAs you can pay for things like co-pays medical bills and vision expenses.
An FSA is like a line of credit. For example, if your account balance is $50 in January but you'd like to buy a two hundred dollar pair of prescription eyeglasses, you can as long as you're on track to save at least two hundred dollars by the year's end. You're covered but remember when the year is up if you don't use it you could lose it.
With an HSA, the money you save always stays with you. Keep in mind you can only spend money you've already saved.
Healthcare question answered.
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