Health Savings and Flex Spending Accounts

FSAs provide you with an important tax advantage that can help you pay for expenses on a pre-tax basis. By anticipating your family’s costs for the next year, you can actually lower your taxable income. You may contribute to Flexible Spending Accounts (FSAs) to help with the cost of your eligible healthcare expenses. Contributions to your FSA are deducted from your pay prior to being taxed, which reduces your taxable income. You should contribute the amount of money you expect to spend on eligible expenses for the year.

HSAs function much like an IRA and a medical flexible spending account, where employees can invest money, reduce taxable income for the amount invested, and use the money without penalty for eligible medical expenses. The interest gained over the duration of the account is also tax free. High Deductible Health Plan (HDHP) participants may participate in the HSA. HDHP participants may not participate in the medical flexible spending account (FSA).