Question 11 of 15
Two accounts with nearly the same initials let you pay medical costs with untaxed money. They follow opposite rules about what happens to the balance.
Which statement about health savings accounts (HSA) and flexible spending accounts (FSA) is accurate?
Correct. Not quite. An HSA belongs to you. The balance carries over without limit and goes with you when you change jobs, but you can contribute only while covered by an HSA-eligible health plan. A health FSA is an employer arrangement. Money left at the end of the plan year is generally lost, unless the employer allows a limited carryover or a short grace period. Fund an FSA based on expenses you are confident you will have.
More: It’s Your Money. On December 31, Your Employer’s Plan May Keep It