As a foreigner living in the U.S., I have no idea what is this and it’s benefits. Would it help me pay less on my health insurance?
Thanks in advance!
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No, it does not help you pay less on health insurance… it’s an account you can use for medical expenses not covered by insurance (bills you pay before you hit your deductible, co-pays, prescriptions, even over the counter medications) and pay for them with pre-tax dollars. So if you set aside $2000 into an HSA, then that’s $2000 you don’t pay income taxes on, saving you something like $450 or so in taxes (depending on tax bracket). But the money can only be spent on those qualified medical related expenses.
HSA’s can roll over year to year, and you can even invest the money if there is over a certain amount in there (similar to a 401k).
FSA’s are available on different types of health insurance plans and are somewhat similar, but cannot roll over so you need to use up whatever money was set aside that year into the FSA.
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