“Many employees are eligible for either an HSA (health savings account) or a FSA (flexible spending account) as a money savings mechanism for health purchases when they are purchasing insurance.
The most common confusion I seem to run into when mentioning my HSA account, even at my doctor or dentist office is: it is not the same thing as a flexible spending account (FSA).
I can see why people would be confused. At first glance, they are very similar. In both you put away money pre-tax, decreasing taxes on your take home pay. You use the money from both to pay for eligible purchases such as copays and office visit costs and prescriptions. In both, an employer may contribute in addition to what the employee adds.
But that’s pretty much where the similarities end. And here is the biggest, most important difference:”