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Comment by fr0sty | Hacker News Reader

An additional problem with an FSA (you can only get an HSA if you have a high-deductable policy) is that the list of acceptable expeditures is limited and the funds expire every year.

I would love to have some tax-free healthcare money to spend, but I cannot guarantee that I will need penicillin, surgery, etc. this year.

I don't want to consign $5,000 to an account with a significant chance that I will simply have to forfeit the money at year's end.

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Right, that's the point of the HSA. HSA's don't expire every year, you just put money into them, keep the money, and have the option of taking it back out and paying taxes on it.

And at least in my state, $5000 is a high deductible--my provider offers a $5000 deductible plan with an HSA. You do end up paying more than $5k out of pocket before hitting the deductible since there's coinsurance and copays and shit like that, but keeping $10-15k in an HSA--knowing you still have full access to that money and it doesn't expire every year (and then perhaps topping it off every so often)--is not a bad plan.

A better solution would be to combine HSAs and 401ks, which many people already have, and allow tax-free withdrawals from the 401k to pay for qualified health-care expenses.

I have an FSA. If it looks like I might have money at the end of the year I stock up on over the counter stuff, cold medicine for us and the kids, ibuprofen, hearing aid batteries (for my 9 year old son), maybe an extra pair of glasses for one of us (in fact if I have enough this year I'm getting prescription sunglasses). Heck even band-aids are an eligible expense. It's pretty easy to come up with something to spend that excess on that you will use. One of my son's hearing aids is getting close to it's expected end of life so I will be budgeting to buy a new one next year. So far I have never had a year where I couldn't use the money by the end of the year.

One thing to note, after this year over the counter meds (like ibuprofen) won't be eligible without a prescription, but band-aids still will be so thanks government for making the program less useful.

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