The primary difference between a Health Savings Account (HSA) and a Flexible Savings Account (FSA);

The primary difference between a Health Savings Account (HSA) and a Flexible Savings Account (FSA);

A. Makes medical payments based on fee-for -service agreements

B. Provides reimbursements only for current year

C. Requires employees to seek medical providers within a network

D. applies specifically to Highly Compensated Employees

View Answer

Answer: B

Explanation:

Both FSAs and HSAs allow people to save for their medical expenses on a tax-advantaged basis by using pretax money to pay for qualified medical costs. One difference between a HSA and a FSA is that the FSA provides reimbursement only for the current year (there are some exceptions – Employees geta grace period of 2 1/2 months to use funds or Employees can roll over $500 into next year’s FSA.).