Helping Your Employees Understand The Difference Between An HSA And An FSA

Healthcare options are confusing. If you have a small business chances are many of your employees will not have insurance through you, and if they do they probably have a high deductible health plan. The good news is that when you have a high deductible health plan you also qualify for a Health Savings Account, which can save you money down the road even if you don’t use it now.

Traditional health insurance plans qualify policy holders for FSA, or Flexible Spending Accounts. These can be great ways to save money on taxes by using pre-tax funds to pay for qualifying health expenditures like glasses and doctor visits. Unfortunately it has a tight limit and if you don’t spend what is in your account by the end of the fiscal year you lose it.

An HSA allows you to contribute more, it qualifies you for more expenditures, and it rolls over in perpetuity. Even if you amass a fortune in your account and end up with better health insurance down the road, you can still spend from it when you are unable to contribute to it.

Learn more about the differences between HSA and FSA accounts from this infographic so you can help your employees make the right choice!