Which is true of a health savings account but not a flexible spending account?
You can use it to pay for prescription medicines.
You can use it to pay for over-the-counter medicines.
You must spend the money in it within a certain period of time.
You can get the amount only if you have a health insurance plan with a high deductible.
You can get the amount only if you have a health insurance plan with a high deductible.
The statement "You can get the amount only if you have a health insurance plan with a high deductible" is true of a health savings account (HSA) but not a flexible spending account (FSA).
The correct answer is "You can get the amount only if you have a health insurance plan with a high deductible."
To determine this, we need to compare the features of a health savings account (HSA) and a flexible spending account (FSA).
1. Can you use it to pay for prescription medicines?
Both HSAs and FSAs can be used to pay for prescription medicines, so this is true for both.
2. Can you use it to pay for over-the-counter medicines?
Both HSAs and FSAs can be used to pay for over-the-counter medicines, so this is true for both.
3. Must you spend the money within a certain period of time?
With FSAs, you must typically spend the funds within the plan year or within a grace period. If you don't, you may lose the remaining balance. However, with HSAs, there is no deadline to spend the funds. Any unspent funds in an HSA will roll over from year to year, allowing you to accumulate savings over time. Therefore, this statement is true for FSAs but not for HSAs.
4. Can you get the amount only if you have a health insurance plan with a high deductible?
This is true for HSAs but not for FSAs. A health savings account is only available to individuals who have a high deductible health insurance plan (HDHP). This means that you can only contribute to an HSA if you have a qualified high deductible health insurance plan. On the other hand, flexible spending accounts do not require a specific type of health insurance plan. Therefore, this statement is true for HSAs but not for FSAs.
In summary, the statement "You can get the amount only if you have a health insurance plan with a high deductible" is true of a health savings account (HSA) but not a flexible spending account (FSA).