Which Is Better- A Health Savings Account Or A Flexible Spending Account?

Q My boss offers both a health savings and a flexible spending account. Which is better?

- Sandra Block

Both HSAs and FSAs let you stash money tax-free to pay for out-of-pocket medical expenses. In addition to co-payments and deductibles, you can use the money for a variety of other expenses, including prescription drugs, orthodontia and eyeglasses. The money you save is shielded from taxable income as well as from payroll taxes.

But the rules governing them differ, and each has its pros and cons. And generally you can’t sign up for both.

Flexible spending accounts. When you sign up for an FSA, contributions are deducted from your paycheck on a pretax basis. In 2017, the maximum contribution is $2,600. That’s probably not enough to cover your child’s braces, although if your spouse has access to a flex account at work, he or she can also contribute up to $2,600.