The Affordable Healthcare Act has been the biggest change in our healthcare system this century (ok, and last century). This doesn’t mean that costs for residential treatment programs and therapeutic programs for acting out teens has gotten cheaper or easier to pay for. To help make sense of how a family can reasonably afford mental health or substance abuse treatment and care, we are comparing two of the most understood and underused tools – the Flexible Spending Account and the Health Savings Account. They sound so similar but definitely have major differences. 

FSA (Flexible Spending Account) and HSA (Health Savings Account) are tax-advantaged accounts for healthcare expenses but they differ in terms of who is eligible, who owns the funds, whether funds are portable or roll over, contribution limits, and eligible expenses. HSAs have higher contribution limits and funds not spent in a given year roll over to the next year, but an HSA is only available to members enrolled in a high-deductible health plan (HDHP). FSAs eligibility is set by employers and usually all employees – whether they participate in a health plan or not – are eligible for an FSA, but unspent and unclaimed funds are forfeited. You continue to own money in the HSA even if you change health plans or terminate employment; however, you lose funds in an FSA when you terminate employment (with some exceptions). 

Check out the chart below for a quick run through of their similarities and differences but make sure to consult your financial professional before making any major financial decisions.