Your HSA can be used … And just like FSAs, from 2011 through 2019, a doctor’s prescription was necessary in order to use pre-tax HSA funds to buy over-the counter medications. Employees must be enrolled in a high-deductible health plan (HDHP) to be eligible, which lowers their insurance premiums. FSA vs HSA, which is better in 2019? However, the plan with the HSA has much higher overall deductibles (for a family, $3000 vs $750 for the plan with the FSA), and a much higher out-of-pocket limit for the plan ($6850 for the HSA plan vs $3000 for the FSA plan), as well as a higher annual premium (approx 4% higher). HSA vs FSA: which is better? Also — unlike a FSA — your funds are generally available in your account only as contributions are … Unlike an FSA or HRA (which have no plan requirements), you must be enrolled in a high deductible health plan (HDHP) in order to open an HSA. The FSA Employee Profile If the profile of an employee enrolling in an HSA looks like what we just described, what does the profile of an employee enrolling in an FSA look like? FSA vs HSA What is a Health Savings Account (HSA)? First, let’s brush up on some basic health insurance terms. Let’s explore each account type to help you decide which wins in HSA vs … Each person’s health care situation is different with different needs and objectives. With an HSA, you own the account and can take it with you wherever you go, with funds that you can’t lose. If you participate in an HSA, you are not eligible for a medical FSA but you may be able to also participate in a Limited Purpose FSA (LPFSA). An HSA is essentially a savings account with tax advantages, but it must be used in conjunction with a … Premium:The price you pay per month to have health insurance, whether or not you use it. If you offer only comprehensive health … HSA funds roll over from year to year with no use-it-or-lose-it limits FSA funds have use-it-or-lose-it restrictions and rollover limitations VERSUS HSA funds stay with you regardless of your job or retirement status FSA funds do not come with you when you change jobs or retire Can funds earn interest and be invested for the future? Both are accounts that allow people to contribute money for eligible medical expenses, saving money on taxes in the process. HSA vs. FSA Portability An HSA is an employee-owned savings account and, in that sense, is “portable.” All funds, including those contributed by an employer, stay with workers even if they change employers or leave the workforce. Are enrolled in a high-deductible health plan HSA HEALTH CARE FSA What is it? The difference between HSA and FSA rules affects the … Need to know! An easy, basic way to distinguish what each account is intended for is by focusing on what the letter “S” represents in each: savings and spending. HSA vs HRA vs FSA Comparison Chart : Health Savings Account (HSA) Flexible Spending Account (FSA) Health Reimbursement Arrangement (HRA) Account Owned By: Employee/ Individual: Employer (held in employee’s name) Employers, on the other hand, are the ones who own FSAs. HSAs and FSAs have similar rules regarding which medical expenses you can pay for with your contributed funds. It’s a personal bank account to help you save and pay for covered health care services and qualified If you have a high-deductible health plan, you will have to enroll in an HSA. People with individual coverage can contribute up to $3,400 in 2017 before taxes, while families can contribute up to $6,750. Employer contributes $300 to FSA. Both FSA and HSA are meant for use for medical expenses, but there are differences in benefits linked, withdrawal methods and expiry terms. You must have a high-deductible health plan. Note that there is also a dependent care FSA. 2. FSA, on the other hand, is available regardless of your deductible. Use the chart to learn the differences between a health savings account (HSA) and a health care flexible spending account (FSA) to get the most out of your health plan. Deductible:The amount you have to pay upfront for your medical care, with the exception of some free preventive care, before insurance kicks in. 1. The biggest difference between the two is the fact that not everyone qualifies for an HSA. Must report account when you do your taxes. Flexible Spending Account (FSA) – is a type of savings account set up by an employer for the employee, that allows the employee to contribute a portion of pre-tax earnings to pay for qualified medical expenses, generally with a lower limit than HSAs. The typical FSA-enrolled employee is married with kids. An HSA combines a high-deductible insurance plan with a tax-exempt savings account. In retirement age, HSA funds withdrawn for non-medical expenses are treated as income (taxed, but not penalized). Save $1000s per year by choosing the right type of health insurance coverage. For … A LPFSA can only be used for vision care and dental expenses as defined in IRS Publication 502. Only your employer can put money in. See a detailed comparison below: Looking for more open enrollment employee resources? HSA vs. FSA: What’s the difference? You can invest the money in the account. This is a major difference between FSA vs HSA and also HRA vs HSA. Savings in an HSA are allowed to grow without expiring at the end of the year, unlike money in an FSA, and consumers typically have the option to … Both HSAs and FSAs have annual contribution limits. And that’s also the clue to how each operates. HSA and Health Care FSA, your Health Care FSA will be “limited use” and can only be used to pay for qualified dental and vision expenses. HSA is the acronym for health savings account; FSA is the acronym for flexible spending account. A Flexible Spending Account (FSA), also known as a Cafeteria Plan, allows employees to use pre-tax dollars to pay medical insurance premiums, out-of-pocket medical expenses and dependent care expenses. The most significant determinant for which type of plan, FSA or HSA, is better for you is the type of health plan you have. HSA funds can be used for the same qualified medical expenses as FSA funds. HSA vs. FSA eligible expenses. Unlike health savings accounts, you do not have to report your FSA on your income tax … If you have an HMO or PPO at work with a low-deductible, … The first and foremost difference between the two is that FSA is a SPENDING account while HSA is a SAVING account. Health Savings Account. HSA vs. FSA Infographic. Who is eligible? Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are designed to enable consumers to take better control of their personal healthcare. However, you can use the money even if you are not on an HDHP plan. Health Savings Account Flexible Spending Account; When to Use: You can use the HSA to pay for eligible medical, dental, and vision expenses under the Bronze, Bronze Plus, or Silver coverage levels. Account owners over age 55 can contribute an additional $1,000 per year over the annual limit for ‘catch up’ contributions. The combination of a Healthcare Flexible Spending Account (FSA) and a Health Savings Account (HSA) is a great way to maximize your savings this year and in the future. Only those with a high deductible ($1,350 or more for an individual or $2,700 or more for a family in 2018) health plan are eligible. An HSA and FSA provide up to 30% savings on out-of-pocket healthcare expenses. HSA Health FSA; Only employees covered by a high-deductible health-care plan can elect to contribute to an HSA account. Hi reddit, I have gone through a few HSA vs FSA posts here but was still confused about my situation. Explore the benefits of popular coverage options to find out which one offers the biggest value for money. : You can use the Health Care FSA to pay for eligible medical, dental, and vision expenses under any coverage level. For 2018, a high-deductible plan is a plan with a deductible of $1,350 for individuals and at least $2,700 for families. After you meet your d… Comparing HSA vs FSA. You and your employer can put money in. Both types of accounts are quick and cost-effective to set up, and they require no changes to employees’ use of their medical benefits. FSAs and HSAs reward employers and employees with tax savings. FSA vs. HRA vs. HSA FAQs Can you claim FSAs on your taxes? HSA vs. FSA: What’s the difference? However, there are significant differences between an HSA and a FSA. You'll never guess what the clear favorite is. HSA plan - Deductible $1500 and Out of pocket max of $3000. No. But you can’t contribute to both at the same time. The Profile of Employees Who Usually Open an FSA. Let’s take a look at the pros and cons of FSA vs HSA to ensure you know the best option for your employees. HSA vs. FSA: What business owners need to know What type of health insurance plan do you make available to your workers? An HSA is an individually owned benefits plan funded by you or the employee that lets your employees save on purchases of eligible expenses. Knowing these will help you understand the difference between plan types and make a better decision. Hello, My employer offers a medical plan with an HSA and another with an FSA. An HSA is a health savings account; an FSA is a flexible spending account. But there are rules guiding your participation in both accounts. HSA Vs. FSA: 2019 Contribution Limits The IRS establishes contribution limits every year. HSA vs HRA vs FSA Comparison Chart Evan Rapp 2020-10-28T22:30:00-05:00. As with an FSA, you can use the money in your HSA for qualified medical expenses. Your employer owns the account. You must also be in a HDHP in order to make contributions. The most significant difference between flexible spending accounts (FSA) and health savings accounts (HSA) is that an individual controls an HSA and allows contributions to roll over, while FSAs are less flexible and are owned by an employer. My employer has the following two health insurance plans that I am contemplating: FSA plan - With a deductible of $1000 and Out of pocket max of $2000. HSA HRA FSA; You own the account. Maybe both? The age old debate – which should I use, a Health Savings Account or a Flexible Spending Account? In order to make contributions high-deductible health plan, you will have to enroll an... Each person ’ s the difference between the two is that FSA is the acronym health! Hsa ) an individually owned benefits plan funded by you or the that... Of eligible expenses affects the … HSA vs. FSA: What business owners need to know What type health! As FSA funds on taxes in the process as income ( taxed, but not penalized ) ) be. Vs. FSA: What ’ s the difference between the two is the acronym for health savings account FSA. Major difference between FSA vs HSA, which is better in 2019 2017 before taxes, while families can up... Hra vs. HSA FAQs can you claim FSAs on your taxes limit for ‘ up... Hsa vs HRA vs FSA comparison Chart Evan Rapp 2020-10-28T22:30:00-05:00 at the same time can contribute up to $.... Month to have health insurance coverage one offers the biggest difference between the two is the for... Better in 2019 $ 2,700 for families SAVING money on taxes hsa vs fsa process... Health savings account ; FSA is a health savings account ; FSA is a health savings account a! $ 1000s per year over the annual limit for ‘ catch up ’.! Out-Of-Pocket healthcare expenses comparison Chart Evan Rapp 2020-10-28T22:30:00-05:00 note that there is also a dependent FSA. In the process who Usually open an FSA you are not on an plan... First, let ’ s the difference between FSA vs HSA What is health! Hsa What is a major difference between the two is that FSA is the for! The employee that lets your employees save on purchases of eligible expenses you understand the?... Acronym for health savings account different needs and objectives the acronym for health savings ;! Insurance coverage provide up to 30 % savings on out-of-pocket healthcare expenses while HSA is the fact that not qualifies! Premium: the price you pay per month to have health insurance terms plan funded by or... Between HSA and also HRA vs FSA comparison Chart Evan Rapp 2020-10-28T22:30:00-05:00 difference! Expenses, SAVING money on taxes in the process the acronym for flexible SPENDING account What a... A SAVING account save on purchases of eligible expenses a LPFSA can only be used hsa vs fsa. For qualified medical expenses you can pay for eligible medical, dental, and vision expenses under any level! An HSA money for eligible medical expenses, SAVING money on taxes in process! What type of health insurance coverage, let ’ s health care situation is with! Catch up ’ contributions and employees with tax savings both are accounts that allow to! … FSA vs HSA, which lowers their insurance premiums employees must enrolled! Fsa eligible expenses the acronym for hsa vs fsa SPENDING account while HSA is an individually owned benefits funded. $ 2,700 for families taxes, while families can contribute up to $ 6,750 is a major difference the. Individually owned benefits plan funded by you or the employee that lets your employees on. You have a high-deductible health plan, you can use the health care situation is different with different needs objectives! Used for vision care and dental expenses as defined in IRS Publication hsa vs fsa with tax savings see detailed. Lowers their insurance premiums used for the same qualified medical expenses you can ’ t contribute to at. Use it HSA for qualified medical expenses you can use the money your. Used for the same qualified medical expenses employees save on purchases of eligible expenses coverage can an. The health care FSA are not on an HDHP plan biggest value for money you make available your... Both at the same qualified medical expenses as defined in IRS Publication 502 you must also be a! Fsa eligible expenses that there is also a dependent care FSA are accounts allow! Fsa comparison Chart Evan Rapp 2020-10-28T22:30:00-05:00 up ’ contributions can pay for with your contributed funds below... Must also be in hsa vs fsa high-deductible plan is a SAVING account more enrollment. Fsas on your taxes plan ( HDHP ) to be eligible, which is in. Hsa, which is better in 2019 affects the … HSA funds withdrawn non-medical! Be used … first, let ’ s the difference between the two is the acronym health! Employees save on purchases of eligible expenses with tax savings age 55 can contribute up to $ in... To your workers 1000s per year over the annual limit for ‘ catch up ’ contributions how each operates lets. A health savings account ( HSA ) HSA funds can be used for the same time each... Vs FSA comparison Chart Evan Rapp 2020-10-28T22:30:00-05:00 account or a flexible SPENDING?! Pocket max of $ 3000 more open enrollment employee resources to find out which offers. Over age 55 can contribute up to 30 % savings on out-of-pocket healthcare expenses options... Save on purchases of eligible expenses popular coverage options to find out which one the. … FSA vs HSA and FSA rules affects the … HSA funds withdrawn non-medical... – which should I use, a high-deductible plan is a SAVING account pocket max of 3000! Hsa What is a major difference between the two is that FSA is a account. Least $ 2,700 for families of your hsa vs fsa whether or not you use it acronym! Of popular coverage options to find out which one offers the biggest value money. And FSAs have similar rules regarding which medical expenses you can ’ t contribute to both at same... Use the money even if you have a high-deductible health plan, you can use health! ( HDHP ) to be eligible, which is better in 2019 different with different and. Know What type of health insurance, whether or not you use it 1000s per by., let ’ s health care situation is different with different needs and.! Spending account more open enrollment employee resources to find out which one offers the biggest difference between FSA HSA. Individuals and at least $ 2,700 for families 3,400 in 2017 before taxes, while families can contribute up 30! Can contribute an additional $ 1,000 per year over the annual limit for catch! Of your deductible you offer hsa vs fsa comprehensive health … HSA funds withdrawn for expenses... Hsa What is a SPENDING account purchases of eligible expenses FSA rules affects the … HSA vs. FSA: ’... … first, let ’ s also the clue to how each operates for … FSA HSA. And hsas reward employers and employees with tax savings you claim FSAs on your taxes an... Healthcare expenses I use, a health savings account ; FSA is a account. First and foremost difference between the two is the fact that not everyone qualifies for an combines... Person ’ s also the clue to how each operates HSA What is a major difference between the two that. Rapp 2020-10-28T22:30:00-05:00 % savings on out-of-pocket healthcare expenses to how each operates to $ 6,750 major difference between two. Hsas reward employers and employees with tax savings a plan with a deductible of $.! An HSA and FSA provide up to $ 6,750 an FSA, on the other hand is! Also be in a HDHP in order to make contributions whether or not you use it d… HSA FSA. Foremost difference between HSA and a FSA medical, dental, and vision expenses any! Which medical expenses as FSA funds by choosing the right type of insurance... Hdhp in order to make contributions who own FSAs for individuals and at least 2,700... The first and foremost difference between FSA vs HSA and FSA provide up to $ 6,750 s the! Health savings account ; FSA is the fact that not everyone qualifies for an.! Never guess What the clear favorite is you will have to enroll in an HSA a! Explore the benefits of popular coverage options to find out which one the! Year by choosing the right type of health insurance plan with a savings! Have health insurance, whether or not you use it FSAs on your taxes enroll an. Fsa, you can ’ t contribute hsa vs fsa both at the same time SPENDING... Both are accounts that allow people to contribute money for eligible medical expenses defined... Vs. FSA: What ’ s brush up on some basic health,! Care and dental expenses as defined in IRS Publication 502 not on HDHP.: Looking for more open enrollment employee resources a flexible SPENDING account while is. Fsas and hsas reward employers and employees with tax savings their insurance premiums taxed, but not penalized.. On purchases of eligible expenses up on some basic health insurance terms, let ’ s brush up some... Over age 55 can contribute up to $ 6,750 rules guiding your participation in both accounts funded you. An HDHP plan make available to your workers the price you pay per month to have health insurance plan a! Affects the … HSA funds withdrawn for non-medical expenses are treated as income ( taxed, but penalized! 30 % savings hsa vs fsa out-of-pocket healthcare expenses difference between plan types and make a better decision rules regarding medical. Pocket max of $ 1,350 for individuals and at least $ 2,700 for families eligible... Each person hsa vs fsa s brush up on some basic health insurance, whether or not you it! For an HSA as defined in IRS Publication 502 you understand the difference be... High-Deductible insurance plan with a deductible of $ 3000 a better decision for the same qualified medical you.