What it is: A health savings account is different from an FSA in that it’s only available to those with a high deductible health plan who aren’t covered by another insurance plan or Medicare, according to the U.S. Treasury Department
. Account holders can contribute a maximum of $3,050 for singles or $6,150 for families in 2010, according to labor and employment law firm Ford & Harrison
. Like FSAs, HSA funds can be used only for specific medical costs. But unlike FSAs, HSA funds aren’t forfeited at the end of the year.
When you might need it: If you have an HDHP and want to save on income taxes, you can contribute to an HSA to cover expenses like health care costs, dental work, vision care and even braces, according to the Health Savings Account Resource Center
. Unlike an FSA, when you leave your current employer, you can take your HSA with you.
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