Boxing Match-Up of the HSA vs. FSA…Who Will Be the Undisputed Champ?
As health care expenses continue to increase, tax-advantaged health plans can be a cost-effective way to offset health care expenses. Two of the most popular – HSA and FSA. Both provide tax savings on health care costs and can make managing out-of-pocket health care expenses easier throughout the year. But who would win in a boxing match?
Let’s meet tonight’s matchup!
Fighting in this corner, a special type of bank account designed for individuals, enrolled in a High Deductible Health Plan (HDHP), to save and pay for qualified health care expenses, with the opportunity to save for the future, and the potential to be used as a powerful tool to diversify retirement portfolios. This contender also provides excellent tax benefits helping to make the most out of every health care dollar…it’s the Health Savings Account (HSA)!
And fighting in this corner, an account for employees to elect pre-taxed funds, up to the IRS annual maximum, to pay for qualified health care costs. Subject to certain rules with unspent funds at the end of the plan year its… the Flexible Spending Account (FSA)!
As Michael Buffer would say, “Let’s Get Ready to RUMBLE!” Let the 12 rounds begin!
Which plan is the undisputed champ for your business?
At the end of the fight, there are no losers, only winners! Regardless of which of these savings solutions an employer chooses, each can help the employer provide a cost-effective employee benefits solution, employees pay for out-of-pocket medical expenses, and both save valuable tax dollars.
In this match-up, the HSA and FSA cannot be teammates in the ring, but the HSA can team up with a Limited Purpose FSA. The LPFSA allows employees the opportunity to build contribution amounts in the HSA while still receiving a pre-tax benefit for eligible dental and vision expenses.
For more information on the BASE® Health Savings Account (HSA), BASE® Flexible Spending Account (FSA), or the BASE® Limited Purpose Flexible Spending Account (LPFSA), call 888.386.9680 or visit www.BASEonline.com.
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