HSA vs FSA: Which One Should You Get?

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Күн бұрын

HSA vs. FSA | Which one should you sign up for, a Health Savings Account (HSA) or Flexible Spending Account (FSA)? In this video, we’re going to compare and discuss the ins and outs of a health savings account vs flexible spending account, through 13 FAQs.
#financialplanning #HSA #FSA
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Skip ahead here!
0:00 - HSA vs FSA: Which One Should You Get?
0:33 - What is an HSA or FSA?
1:10 - Benefits of each
2:30 - Who is eligible?
4:10 - What are qualified expenses?
8:38 - Are eligible expenses the same?
9:10 - What are two types of spending accounts?
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The One-Page Financial Plan by Carl Richards (easy read, holistic + fun graphics!) amzn.to/35NH54Z
Simple, Smart Investing by Ian Kennedy (can help you construct your investment portfolio)
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A Random Walk Down Wall Street by Burton G. Malkiel (classic book that sold me on index funds) amzn.to/2H7pbzS
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Пікірлер: 78

@DistrictCapital 3 жыл бұрын

What other questions do you have about HSA and FSA that we can answer?

@shoutz1957 2 жыл бұрын

Is each individual/person eligible for an hsa

@DistrictCapital 2 жыл бұрын

@@shoutz1957 Each spouse can have their own HSA, but the combined maximum contribution is $7200 for 2021 and $7300 for 2022.

@shoutz1957 2 жыл бұрын

Thank you for the reply

@TiarraEss 2 жыл бұрын

Could I enroll now and immediately start using the FSA or HSA? I would like to get braces. Also, if I enroll in an FSA, what happens when you switch jobs?

@DistrictCapital 2 жыл бұрын

@@TiarraEss If you enroll now for 2022, you would not be able to use the funds until 2022 when they start deducting the amount from your paycheck. For switching jobs, you generally still have until the end of the tax year to use up funds from the FSA account, but you will want to check with your HR department on any specific rules they have.

@dennisotieno4568 Жыл бұрын

Thanks. The bonus tip at the end answered my question

@DistrictCapital Жыл бұрын

Perfect. Glad we could help!

@chaunecytaylor-ld8km 7 ай бұрын

Thank you for such an easy explanation of this. 😊

@DistrictCapital 7 ай бұрын

Thank you for your kind comment. I'm glad you found the video useful. Have a great week!

@happyhippr 2 жыл бұрын

great video - thank you!

@DistrictCapital 2 жыл бұрын

You're welcome!

@petalflower107 Жыл бұрын

Thank you, very helpful.

@DistrictCapital Жыл бұрын

I am glad that you found this video helpful. Have a wonderful day!

@ciaratejano302 Жыл бұрын

Thank you for the information I've learned a lot! Please enlighten me about this Tax-sheltered retirement plan. Thank you

@ItzMyMojo Жыл бұрын

Great information

@DistrictCapital Жыл бұрын

Thank you very much. Have a great day!

@laizhouyang389 Жыл бұрын

If you are young and has no major health issue, choosing HDHP and HSA definitely wins out.

@Piwork69 7 ай бұрын

If you are 50, a HDHP is a crappy health insurance plan. I WANT to have a HSA but dont qualify bc my plan is not eligible. It covers too much.

@elliottblack1579 Ай бұрын

It’s also beneficial if you have many health problems or take medications

@ultraniusmaximus1536 Жыл бұрын

I believe you purchase vitamins if you have a written statement from your provider that you need it (or something to that effect).

@liamnguy5054 2 жыл бұрын

i think it is still depend, for example my case that I have a young kid and my wife is pregnancy's I will definitely spent a lot of money on medical so I should choose a plan that cost less than high deductible plan to eligible for HSA. so I could of save a lot more money

@manifistator Жыл бұрын

Mine is a use it or lose it at the end of the year.

@myothercarisadelorean8957 7 ай бұрын

Question about FSA. I usually budget every year with that I plan on use my FSA for. If I'm still not sure on the amount to contribute, is it bests to just max it out? You said the higher the contribution the lower the taxable income.

@2Rugrats9597 5 ай бұрын

I have both! One for dental and vision and the other for medical only. The HSA for medical and a Partial FSA for dental and vision. I save a lot on taxes by doing both

@DistrictCapital 4 ай бұрын

Fantastic! Thanks for sharing.

@selenecoello5937 2 жыл бұрын

I have HMO insurance w a High deductive plan of $3,000 w my employer. per IRS it looks like i'm eligible for an HSA because my deductible is $3k (consider high) however my plan does not specify is HSA eligible from my employer. Question: Can I still have an HSA from any other provider such as fidelity to contribute now and use the tax benefits for 2021?!

@Piwork69 7 ай бұрын

Most dont qualify for either. A qualifying plan for HSA is really just a bad health insurance plan bc a high deductible means coverage is limited, and you'd be on the hook for the whole deductible if you had a major medical episode, which could be as much as $6,000.

@greenfein786 2 жыл бұрын

Hi! Would you choose PPO or HSA/HDHP if the PPO was $67/month with a $250 deductible or the HDHP was $1500 deductible and $37/month?

@DistrictCapital Жыл бұрын

Hi @shaderrrr1 - Sorry, for compliance reasons, we are unable to provide financial or investment advice. If you are interested in hiring a financial advisor, feel free to set up a discovery call here - districtcapitalmanagement.com/schedule-call/

@ezracaisip2122 2 жыл бұрын

I drink vitamin D everyday too!

@DistrictCapital 2 жыл бұрын

1000 or 2000 IU? :)

@zoioilazoi 6 ай бұрын

I have a high copay bill $3000 . How reimbursement work if I submit a deduction directly to 26 pay period?

@mellowc 10 ай бұрын

Do you put money in the HSA in one amount at beginning of year or does it go in each check and available as you put in?

@DistrictCapital 9 ай бұрын

@mellowc Thanks for your question. You can either contribute via one lump sum (which could be at the beginning of the year), set up Direct Deposit from each paycheck, or schedule a recurring monthly deposit via your own bank account. Once the funds are deposited into your HSA, they are available for immediate use. Thanks!

@airiannasmith5167 Жыл бұрын

Are vitamins and sups now eligible? I saw them listed on the FSA and HSA Amazon store

@DistrictCapital Жыл бұрын

Yes, some vitamins and sups are now HSA eligible. Thanks!

@catrina2005 Жыл бұрын

Can the dependent care fsa be used for the dependent medical cost or only on childcare cost? Thanks bunches!

@DistrictCapital Жыл бұрын

Thanks for your question. The dependent care FSA can only be used for childcare costs. However, you can use the funds in your FSA to pay for certain medical and dental expenses for your dependents.

@shashink5923 2 жыл бұрын

If I have an option for both FSA and HSA, can I opt for both? For doctor copay and deductible, can I use FSA if I'm on High Deductible Health Plan?

@DistrictCapital 2 жыл бұрын

Hello Shashin, thanks for the question! You can only participate in an HSA or Medical FSA, you cannot contribute to both.

@adrianavargas8340 Жыл бұрын

Hi! I have the option to enroll in both an HSA and a limited FSA. Would you recommend I do both or just HSA?

@DistrictCapital Жыл бұрын

It really depends on your situation. You can also read our blog for a more detailed overview - districtcapitalmanagement.com/hsa-vs-fsa/

@greenfein786 2 жыл бұрын

Can you explain triple tax advantage?

@fsaguide 2 жыл бұрын

1) You are not taxed on the contributions you make into an HSA account, as this is your pre-tax funds going into the account. 2) Health SAVINGS account balances can grow based on the investments and interest rates you have with your provider, and the gains you make are tax-free 3) Qualified withdrawals and expenditures are also tax-free (you're not taxed if you take out your money for a qualified reason).

@svigneshanand Жыл бұрын

Currently my employer provides 'PayFlex' as the HSA account but how can i change to a differ provider? will i can do it or only my Employer can do it?

@DistrictCapital Ай бұрын

Thanks for your question. To change your Health Savings Account (HSA) provider from PayFlex to a different provider, you'll typically need to go through your employer, as they are the ones who establish and manage the HSA program for their employees. Have a great day!

@bryanbrasile2703 Жыл бұрын

How do I know if my health plan is considered a HDHP?

@DistrictCapital Жыл бұрын

To determine if your health plan is considered a High Deductible Health Plan (HDHP), you can review the plan documents or contact your health insurance provider directly. Here are some steps you can take to find out: Review Plan Documents: Start by reviewing the summary of benefits or plan documents provided by your health insurance provider. These documents typically outline the details of your health plan, including the deductible, out-of-pocket maximum, and coverage details. Look for information that indicates whether the plan qualifies as an HDHP. Check the Deductible Amount: HDHPs have higher deductibles compared to traditional health plans. The deductible is the amount you must pay out of pocket before the insurance coverage kicks in. If your plan has a higher deductible than the minimum threshold set by the Internal Revenue Service (IRS), it may qualify as an HDHP. Verify HSA Eligibility: HDHPs are typically paired with Health Savings Accounts (HSAs). HSAs are tax-advantaged savings accounts that allow you to contribute pre-tax dollars to cover qualified medical expenses. If your plan is eligible for an HSA, it is likely an HDHP. Check if your plan meets the IRS requirements for HSA eligibility, including the minimum deductible and out-of-pocket maximum limits. Consult Your Insurance Provider: If you are still unsure whether your plan qualifies as an HDHP, reach out to your health insurance provider's customer service or contact a representative who can provide you with accurate information. They can clarify whether your plan meets the criteria for an HDHP and answer any specific questions you may have.

@smoothmove9258 Жыл бұрын

Is surgery deductible payment eligible for HSA? Thank you

@DistrictCapital 11 ай бұрын

Expenses related to surgery are generally considered eligible for reimbursement from a Health Savings Account (HSA). HSA funds can be used to pay for medical expenses that are considered deductible under the Internal Revenue Code Section 213(d). This includes expenses for the diagnosis, cure, mitigation, treatment, or prevention of disease or for the purpose of affecting any structure or function of the body. Surgical procedures, including the costs associated with the surgery itself, such as surgeon fees, anesthesiologist fees, hospital charges, and other related expenses, are typically considered eligible expenses for HSA reimbursement. However, it's important to note that cosmetic surgeries that are solely for aesthetic purposes and not for the treatment or prevention of a medical condition are generally not considered eligible for HSA reimbursement. As with any HSA expense, it is important to keep documentation of the surgical expenses, such as itemized bills, receipts, and any other supporting documents, for tax purposes. It's also recommended to consult with a tax professional or refer to the IRS guidelines to ensure that specific expenses meet the eligibility criteria for HSA reimbursement.

@olivermanley3288 2 жыл бұрын

Sorry if I missed it but you mentioned that you treat your HSA as a retirement vehicle -- does that means we can withdraw for non-healthcare expenses as long as it's after retirement age? Thanks

@DistrictCapital 2 жыл бұрын

Hi Oliver! After age 65, you can withdraw funds from an HSA for any reason with no IRS penalty. You will still pay ordinary income tax on any withdrawals that are not used for medical expenses.

@atomicdmt8763 7 ай бұрын

and who wouldnt likely have some medical expenses at 65! thanks @@DistrictCapital

@kbz311 2 жыл бұрын

If I'm investing the money in my HSA, is it better to pay for medical expenses with the HSA or cash so I can continue to get the HSA tax-free growth?

@DistrictCapital 2 жыл бұрын

Hello Kateri, this can depend, but generally we recommend that people continue to grow their HSA tax free and pay cash for current medical expenses.

@door4funkevo526 8 ай бұрын

@@DistrictCapital Could you explain more on this? If I pay cash then it is not from HSA account and I would loose tax advantage on that cash payment.

@veronicagarcia5045 2 жыл бұрын

How would I go about opening an HSA if my employer doesn't offer it?

@DistrictCapital 2 жыл бұрын

Hi Veronica, you easily open an HSA directly through an HSA provider. There are actually many options. Look for ones where you'll have the ability to invest in stocks. We advise clients on this, if that's something you're interested in. districtcapitalmanagement.com

@curtiswfranks Жыл бұрын

I have two: One with Fidelity (for investment) and one with my local bank (for saving/quick access). I roll money over from my savings/clearing-house HSA to my investment HSA exactly once per year (the maximum number of times for me) so that the money in my savings HSA is not less than my health insurance policy's annual out-of-pocket maximum plus a buffer. If you do likewise, make sure to ask for a roll-over (exactly the terminology) and that you will not have your savings account closed, incur any penalties or deleterious tax implications, etc. Also, make sure that you do not contribute more than the annual maximum to your HSAs in total; a roll-over should not count toward that (only new contributions will), but you should explicitly check.

@chewdrag 7 ай бұрын

What happens when you have a health plan that qualifies for FSA and your spouse has a health plan that qualifies for HSA?

@Piwork69 7 ай бұрын

With FSA's you "use it or lose it" if you dont use all your contributions in your current year. HSA's carry over. Plus good tax deduction when you contribute AND when you pay for medical appointments, copays or meds using the HSA for the SAME money. If you are an independent contractor or self-employed, that is cool. If you are an employee, you lower your tax burden.

@sa2018 2 жыл бұрын

How does the reimbursement work if you are posted overseas?

@DistrictCapital 2 жыл бұрын

It shouldn't be any different, though it may depend on what the reimbursement is for. You may want to ask your FSA/HSA company for clarification on what is needed. Reimbursement itself would usually go to a US bank account. My co-worker used her former dependent care FSA for an off-base Japanese pre-school and had no issues with reimbursement.

@sreedharjana9732 3 ай бұрын

Can I take HSA and my wife take FSA ? Will that work or doable

@DistrictCapital 3 ай бұрын

Yes, you can take an HSA while your wife takes an FSA, provided that you both meet the eligibility criteria for each account type. However, it's advisable to consult with a financial advisor, as they can provide personalized recommendations on which accounts suit your needs and circumstances best. Have a great day!

@shadowmaster9780 7 ай бұрын

Use or lose it, I lost $1000 last year! Cigna!

@ManchesterFanUnited 7 ай бұрын

Hilda doesnt like HSAs

@DmitryMalinkin 7 ай бұрын

I unfortunately switched from FSA to HSA last year (2022). Since the year for the market was a disaster I lost a lot of money. My suggestion is not to use a very risky tool such as HSA. You can lose all of your contributions instead of getting the solid amount as a return from FSA.

@arpitmalhotra8130 Жыл бұрын

Do I get the money back for the year in Healthcare FSA through employer if I havent used any of it? Or does it automatically goes towards next year? @DistrictCapital

@DistrictCapital 11 ай бұрын

The rules regarding the use of funds in a Healthcare Flexible Spending Account (FSA) can vary depending on your employer's specific policies. Typically, funds contributed to an FSA are subject to a "use-it-or-lose-it" rule, meaning that any money remaining in the account at the plan year's end is forfeited. However, there are some exceptions and options that may apply: Grace Period: Some employers offer a grace period that allows employees to use the funds remaining in their Healthcare FSA for a certain period after the plan year ends. This grace period is typically up to two and a half months. If your employer provides a grace period, you would have extra time to utilize the funds for eligible healthcare expenses incurred during that period. Rollover: Another option available to employers is the rollover provision, which allows a portion of unused funds to carry over into the next plan year. The maximum amount eligible for rollover is typically $500, but this may vary depending on the employer's plan design. If your employer offers the rollover provision, the unused funds, up to the maximum allowed, would be carried over into the next year and added to your new FSA balance. Limited Grace Period or Rollover: Some employers may provide either a grace period or a rollover provision, but not both. In such cases, it's important to understand your employer's specific rules and limitations. To know the exact details about how your Healthcare FSA works and whether there is a grace period, rollover provision, or any other specific rules, it's best to consult your employer's benefits department or refer to the plan documents they provide. They will be able to provide you with the most accurate information regarding your specific FSA and its policies.