No one ever said healthcare was simple. This essential part of life only becomes more complicated towards the end of the year as different accounts have different rules. The two common accounts available to people with health insurance are a health savings account (HSA) and a flexible spending arrangement (FSA). Both of these accounts allow you to set aside money for health care costs known as qualified expenses, which include deductibles, copayments and coinsurance, and monthly prescription costs.
 
While both an FSA and HSA are accounts you can contribute to tax-free to save for medical costs, there are certain discrepancies between the two that you should know. Let’s take a look at the key differences between the accounts and how they relate to your deductible.

What To Know If You Have An HSA

Just because you have a High Deductible Health Plan (HDHP) does not mean it qualifies for an HSA. HSA qualified HDHPs have:

• A higher deductible than typical individual health insurance plans.
• A maximum limit on the annual deductible and medical expense costs, including copays and other items.
• No insurance coverage until the deductible is met.
• For 2019, an HDHP is considered to be any health plan that has a deductible of $1,350 or more for an individual or $2,700 or more for a family. With an HSA, you can change how much you contribute to it at any time during the year.

A great perk of an HSA is that your unused balance rolls over into the next calendar year. That means that any money you invest into the account can grow tax-free from year to year if you don’t need to spend it on medical costs. If you don’t have high medical or out-of-pocket medical expenses, you won’t be losing the money you put into your HSA at the end of the year because you can access it at any time in the future in case you have to pay for a medical expense. 

What To Know If You Have An FSA

Unlike an HSA, you can have an FSA with any type of health insurance plan. You won’t be limited by your deductible with an FSA. However, you are limited when you can adjust the amount you contribute to the account. You can only change this amount at open enrollment or when there is a change in employment or family status. 
 
The other major difference between an FSA and an HSA is that the funds in an FSA do not roll over at the end of the calendar year. If you have an unused balance on December 31st, you forfeit that balance and start from scratch on the first of the new year. You also lose your FSA if you change your job, which is not the case with an HSA. 

What Do These Differences Mean For You?

As the end of 2019 quickly approaches, it’s time to think about using the funds in your HSA or FSA. This is an especially important consideration for anyone with an FSA, because you will forfeit those funds on January 1st. Rather than see all of the money you put into the account go wasted at the end of the year, use it for qualified medical expenses. At YourCare Medical Supply, all of the products sold in the store qualify for purchase with your FSA. or HSA account.

The world of health insurance is complicated. If you have any further questions about how to utilize your FSA, HSA, or meet your deductible before the end of 2019, contact the experienced team at YourCare Medical Supply today.