HSA vs FSA 5 Reasons HSA’s

Will (Slowly) Replace FSA’s

Health insurance is changing. While the

“insurance” for catastrophic expenses remains, much of the

smaller, day to day costs are now paid by you.

Whether you have a PPO, HMO or HDHP, you likely

have co-pays, deductibles and other out of pocket expenses. Many people

already feel they are in “high deductible” health plans.

One recent (2015) survey from the firm Arthur J.

Gallagher found the average deductible across health

plans for a family was $3,000, and for singles was $1,200.

And this was in network care.

Employers are responding to rising healthcare costs by

shifting some responsibility onto their employees. This is

a decade long trend and employees (and retirement savers) should assume it wll

continue, and plan accordingly.

This is why becoming familiar with Health Savings Accounts (HSA’s) is so important. Most

employees will need to determine a cost/benefit analysis for their health insurance. Not only for healthcare, but overall budget and retirement

preparation.

Five Reasons to consider HSA’s

over FSA’s

1. HSA’s roll over every year, no “use or lose” penalty. You must use your FSA balance each

year otherwise the funds are forfeited ($500 rollover recently

enacted).

2. HSA Account Portability. Employers “own” your FSA plan,

those are their dollars. On the other hand, an

HSA. is much like a 401(k). Those funds are

yours day one.

3. HSA’s can be investment accounts and grow like your 401(k) and IRA. An FSA is essentially an annual debit account. An HSA can be invested in mutual funds and grow for

years and decades.

4. HSA’s help you plan for retirement health

expenses. Unlike FSA’s which not only pay no

interest, but expire each year, HSA’s can be used for retirement planning.

5. HSA’s offer consumers a choice of providers. Not only are HSA’s portable, you can also choose

your account provider.

No one looks forward to increasing healthcare

costs. Yet in your budgeting it makes sense to consider the 20+ year

trend. HSA’s offer unmatched savings and growth features when

compared to FSA’s

Thank You!

Download the free HSA Coach app to manage your HSA and watch your wealth grow. Available on iOS and Android.