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Health Savings Account Plans Question & Answers

2014 April 22
by Sarah Fields

Thomas asks…

Are Flexible spending accounts different from Health savings accounts?

I know health savings accounts expire- which I think is insane.
But do Flexible Spending accounts do?

Are they just the same thing?
Am I really that confused?
Thank you for your answers.

Sarah Fields answers:

They are not the same.

Flexible Spending Account is your employer hold it for you. But you have to use it by the end of the year( some let you use it until April 15 of next year). But you have to use or lose it. FSA is expired

HSA is the account you can roll over to next year. You manage your own HSA account(through bank or brokerage firm). The employer deposit certain amount of money for HSA account. IRS let you contribute pre-tax money to HSA too. If you young and healthy, your HSA grow like 401k and keeping the money grow until you use it for health purposes. So HSA is never expire as long as you keep your health plan rolling.
I hope I answer your question clearly

Donald asks…

What is the Health Savings Account?

I chose an insurance plan at work that is a high deductible plan. I have been sent a letter if I want a health savings account? What is this? Help me please.

Sarah Fields answers:

A Health Savings Account does not replace insurance–you must have a certain insurance policy in place (with a high deductible) in addition to the Health Savings Account which is your money deposited into a special bank account used to pay deductibles. You get tax savings on the money deposited into this account but there are restrictions of the withdrawal and high penalties if you withdraw outside the guidelines for the account.

I’ve listed below the link for Wickipedia article on Health Savings Accounts and another source as well. I’ve also listed a couple links to discussions of the pros and cons of the HSA, which are also excellent.

Wickipedia says:
A health savings account (HSA), is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). The funds contributed to the account are not subject to federal income tax at the time of deposit. Unlike a flexible spending account (FSA), funds roll over and accumulate year to year if not spent. HSAs are owned by the individual, which differentiates them from the company-owned Health Reimbursement Arrangement (HRA) that is an alternate tax-deductible source of funds paired with HDHPs. Funds may be used to pay for qualified medical expenses at any time without federal tax liability. Withdrawals for non-medical expenses are treated very similarly to those in an IRA in that they may provide tax advantages if taken after retirement age, and they incur penalties if taken earlier. These accounts are a component of consumer driven health care.

Proponents of HSAs believe that they are an important reform that will help reduce the growth of health care costs and increase the efficiency of the health care system. According to proponents, HSAs encourage saving for future health care expenses, allow the patient to receive needed care without a gate keeper to determine what benefits are allowed and make consumers more responsible for their own health care choices through the required High-Deductible Health Plan.

Opponents of HSAs say they worsen, rather than improve, the U.S. Health system’s problems because people who are healthy will leave insurance plans while people who have health problems will avoid HSAs. There is also debate about consumer satisfaction with these plans.

William asks…

What is the best kind of health insurance for fertility treatment?

Shopping for insurance and would like an honest answer from the people. I know I will be seeing a fertility specialist and doing lots of lab tests. Does anyone know which kind of insurance would best fit my needs? fyi, I live in northern California. Would a health savings account work?

Sarah Fields answers:

The only health insurance plans that have any fertility coverage are “Cadillac” group policies; generally those policies you’d get if you are employed as a highly paid government employee. Individual health insurance policies in CA does not cover most fertility treatments.

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