BillM223
Expert Alumni

Deductions & credits

An FSA is older (and IMHO, not as good) than an HSA. 

 

An FSA is a program handled by your employer, where you can contribute a modest amount of money to a "Flexible Spending Arrangement" ($2,850 in 2023) through payroll deduction. You would spend money on medical expenses and ask your employer for reimbursement. If you don't spend it all in one year, you may lose the rest or carry over a part of it to next year (it depends on your employer).

 

An FSA is conflicting coverage for an HDHP, so you can't contribute to an HSA while you are under an FSA. Furthermore, since FSAs automatically cover your spouse, if your spouse has an FSA, then you do, too, so no HSA contributions.

 

As I noted most employers who offer HDHP policies will help you set up an HSA, but if they won't, do a search on the Internet for HSA and large companies you recognize. Unfortunately, I can't make any suggestions.

 

Just remember that if you set up an HSA, it belongs to you, not to your employer. This means that when you leave your employer, you don't have to close the HSA (in fact, you get penalized for doing so) - it's similar to an IRA in this. And like an IRA, the HSA is persistent - it stays around for year and year.

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