The end of the year is only a few weeks away and it’s time to get your finances in shape for the new year. So do you have to spend all of the money in your HSA account?
CHARLOTTE, NC – With the year only weeks away, it’s time to prepare your finances for the new year. So do you have to spend all of the money in your health savings account or you will lose it?
We have seen many questions about the difference between a health savings account known as an HSA and a flexible spending account known as an FSA.
Although the two acronyms only differ in one letter, there is one important difference that pops up every December.
Do you have to spend all of your health savings account money by the end of the year?
No, you don’t have to spend your health savings account by the end of the year, but you do need to use your FSA money by the end of the planned year.
WHAT WE FOUND:
First, let’s consider the difference between an HSA and FSA. According to Healthcare.gov, a health savings account is a type of savings account that allows you to set aside pre-tax money to pay for qualified medical expenses.
“It’s like a retirement account, but it’s used for medical expenses,” said Henry.
In the meantime, a flexible savings account is a special type of account that you deposit money into that you use to pay for certain healthcare expenses.
“Flexible expense accounts have a little more variety in what they can be used for as opposed to an HSA, which is usually medical expense,” said Henry.
Henry generally tells us that you must use the money with an FSA within the plan year. However, according to Healthcare.gov, your employer may allow an additional period to use these funds.
“You don’t want to lose money, so you have to spend it and you will find something there to spend it on,” said Henry.
There is different things You can spend your FSA money on dental care, eye care, health checkups, and more.
In the meantime, Henry tells us that even if you move to another company, you can keep your HSA account for as long as you need it and you can use the money to pay for your family’s medical expenses.
“In the HSA, you multiply the money and don’t spend it every year,” he said. You can actually leave that employer and take the HSA with you, and it’s a health savings account that stays there all the time. “
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