Health Savings Account (HSA) – You may contribute to an HSA if you have a High Deductible Health Plan. This plan allows you to contribute pre-tax dollars to pay qualified healthcare expenses; generally, these funds cannot be used to pay premiums. Unlike an FSA, you do not have a time limit to spend these funds. The 2023 contribution limits are $3,850 for individuals and $7,750 for families.

Retirees and their dependents who are enrolled in TRICARE are not eligible to participate in an HSA. If you want to participate in an HSA, then you must disenroll from TRICARE.

Flexible Spending Arrangement (FSA) – If your employer offers this, you can contribute pre-tax money to pay qualified health care expenses. Some employers may choose to contribute to this account. The 2023 contribution limit is $3,050 per employer; however, your employer may set a lower limit. You must spend the money you put aside on health care expenses during that year unless your employer allows a grace period (normally up to 2.5 months) and/or carry-over (maximum $610).

Retirees and their dependents who are enrolled in TRICARE may use an FSA; however, it is important to know that FSA funds cannot be used to pay your TRICARE premiums.

*Disclaimer.  For entertainment purposes only.  I am not a financial professional.  Modify your decision making as necessary.