Health Savings Accounts (HSA) VS Flexible Spending Accounts (FSA)

What's the difference between an HSA and FSA? 

Yes, so the primary difference with an HSA and an FSA is portability. So if you are contributing to an HSA, you have the option to be able to roll that over from year to year. And you also have the option to be able to take it with you to a subsequent employer, if you decide to leave your organization. And the FSA, sometimes you'll hear referred to as use it or lose it. Meaning that if you do not utilize the funds that you have allocated for the FSA for that year, then you do forfeit those funds at the end of your plan year after a short run out period. Or if you were to leave your employer. The other big difference and this kind of goes to case point with the deductible and kind of asking yourself how much you have available to pay right away if something happens. An FSA is generally front loaded for you, so if you start your plan year on January 1st, and you promise $500 into your FSA, that $500 is available to you right away. So if you have an injury or some other medical need, and you need to pay that $500, it's available to you before you start to pay anything out of your paycheck towards that. So incrementally throughout the year, you are paying that back to yourself but the advantage of putting money into an FSA or an HSA versus a traditional bank account is that you then get to contribute on a tax free basis. So to Andrew's point about the tax tables when you pay premiums towards your health insurance, or you put money aside into an FSA or an FSA. You are lowering your overall remaining income that could be taxed by the federal and state governments.

Okay, that's a great explanation. Thank you, Katie.