Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are both tax-advantaged accounts that can be used to pay for qualified medical expenses. While they share some similarities, there are also key differences between the two.

HSAs are available to individuals who are enrolled in a high-deductible health plan (HDHP). Contributions to an HSA are tax-deductible, and the funds in the account can be invested and grow tax-free. Withdrawals from an HSA for qualified medical expenses are also tax-free. For example, if an individual contributes $3,000 to their HSA in a given year and is in the 25% tax bracket, they could save $750 in taxes.

On the other hand, FSAs are available through an employer and allow employees to set aside pre-tax dollars to pay for eligible medical expenses. Unlike HSAs, the funds in an FSA generally do not roll over from year to year, so it's important to plan FSA contributions carefully to avoid forfeiting any unused funds at the end of the plan year.

It's important to note that both HSAs and FSAs have a list of qualified medical expenses that can be paid for using the funds in these accounts. These expenses can include doctor's visits, prescription medications, and certain medical supplies.

Understanding the differences between HSAs and FSAs can help individuals and employees make informed decisions about which option may be best for their healthcare and financial needs.