Over the years, Congress has tried addressing rising healthcare costs using the tax code and bombarding you, dear reader, with terminology and rules that might sound familiar, but with no details actually remember. HSA’s and fall into this category as people are very confused about what they are and what they do. If you think these terms sounds a bit like retirement planning…..that’s because they are!
Health Savings Account vs. Flexible Savings Account
HSA’s and FSA’s have different rules:
Depending on how long you’ve been in the workforce you likely ran into some variation of an FSA (Flexible Savings Account) that could be used to pay medical expenses pre-tax. Use it or lose it is the standard mantra…and there’s a mad rush at the end of the year to spend those dollars before they go back to your employer.
Enter the HSA – a later concept that tinkers with the tax code to allow you, and sometimes your employer, to add money to an account and those dollars actually rollover year-over-year. Typically associated with a high deductible health plan, these can be great tools with tax advantages for employers and employees.
The bottom line – Congress has tinkered with the tax code a lot since the early 2000’s and new opportunities abound. Make sure to contact your health insurance professional to see what’s possible. Don’t assume health coverage isn’t something you can afford. Make sure to get something in your benefits column.
There are options out there you don’t have to sell a kidney for, and options that pay you big tax deductions.
Need help finding a benefits person – give me a call and I’ll share some names.