After you meet your d… FSAs and HSAs reward employers and employees with tax savings. Only your employer can put money in. You and your employer can put money in. Note that there is also a dependent care FSA. You'll never guess what the clear favorite is. Hi reddit, I have gone through a few HSA vs FSA posts here but was still confused about my situation. 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. 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. Let’s take a look at the pros and cons of FSA vs HSA to ensure you know the best option for your employees. An HSA is an individually owned benefits plan funded by you or the employee that lets your employees save on purchases of eligible expenses. The age old debate – which should I use, a Health Savings Account or a Flexible Spending Account? You can invest the money in the account. The difference between HSA and FSA rules affects the … FSA vs. HRA vs. HSA FAQs Can you claim FSAs on your taxes? HSA HRA FSA; You own the account. 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). Maybe both? If you have an HMO or PPO at work with a low-deductible, … FSA vs HSA What is a Health Savings Account (HSA)? Let’s explore each account type to help you decide which wins in HSA vs … HSA funds can be used for the same qualified medical expenses as FSA funds. : You can use the Health Care FSA to pay for eligible medical, dental, and vision expenses under any coverage level. 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? HSA vs. FSA Infographic. HSA plan - Deductible $1500 and Out of pocket max of $3000. HSA HEALTH CARE FSA What is it? HSA is the acronym for health savings account; FSA is the acronym for flexible spending account. Are enrolled in a high-deductible health plan Save $1000s per year by choosing the right type of health insurance coverage. Both FSA and HSA are meant for use for medical expenses, but there are differences in benefits linked, withdrawal methods and expiry terms. HSA vs. FSA eligible expenses. 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. A LPFSA can only be used for vision care and dental expenses as defined in IRS Publication 502. Hello, My employer offers a medical plan with an HSA and another with an FSA. 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. This is a major difference between FSA vs HSA and also HRA vs HSA. You must also be in a HDHP in order to make contributions. Comparing HSA vs FSA. As with an FSA, you can use the money in your HSA for qualified medical expenses. You must have a high-deductible health plan. 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 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? In retirement age, HSA funds withdrawn for non-medical expenses are treated as income (taxed, but not penalized). Both HSAs and FSAs have annual contribution limits. See a detailed comparison below: Looking for more open enrollment employee resources? FSA, on the other hand, is available regardless of your deductible. Employers, on the other hand, are the ones who own FSAs. Also — unlike a FSA — your funds are generally available in your account only as contributions are … The typical FSA-enrolled employee is married with kids. With an HSA, you own the account and can take it with you wherever you go, with funds that you can’t lose. 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. An HSA is a health savings account; an FSA is a flexible spending account. An HSA combines a high-deductible insurance plan with a tax-exempt savings account. Account owners over age 55 can contribute an additional $1,000 per year over the annual limit for ‘catch up’ contributions. However, there are significant differences between an HSA and a FSA. However, you can use the money even if you are not on an HDHP plan. Knowing these will help you understand the difference between plan types and make a better decision. Explore the benefits of popular coverage options to find out which one offers the biggest value for money. But there are rules guiding your participation in both accounts. 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. Unlike health savings accounts, you do not have to report your FSA on your income tax … And that’s also the clue to how each operates. For 2018, a high-deductible plan is a plan with a deductible of $1,350 for individuals and at least $2,700 for families. HSA vs. FSA: What business owners need to know What type of health insurance plan do you make available to your workers? 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. An HSA and FSA provide up to 30% savings on out-of-pocket healthcare expenses. 1. 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. Who is eligible? 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. The Profile of Employees Who Usually Open an FSA. 2. The biggest difference between the two is the fact that not everyone qualifies for an HSA. Your employer owns the account. Premium:The price you pay per month to have health insurance, whether or not you use it. Both are accounts that allow people to contribute money for eligible medical expenses, saving money on taxes in the process. Employer contributes $300 to FSA. 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. If you have a high-deductible health plan, you will have to enroll in an HSA. 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). Health Savings Account. Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are designed to enable consumers to take better control of their personal healthcare. Must report account when you do your taxes. HSA vs. FSA: What’s the difference? The first and foremost difference between the two is that FSA is a SPENDING account while HSA is a SAVING account. Need to know! If you offer only comprehensive health … People with individual coverage can contribute up to $3,400 in 2017 before taxes, while families can contribute up to $6,750. 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 … 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. 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. An HSA is essentially a savings account with tax advantages, but it must be used in conjunction with a … Both types of accounts are quick and cost-effective to set up, and they require no changes to employees’ use of their medical benefits. But you can’t contribute to both at the same time. HSA Vs. FSA: 2019 Contribution Limits The IRS establishes contribution limits every year. 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. It’s a personal bank account to help you save and pay for covered health care services and qualified Your HSA can be used … First, let’s brush up on some basic health insurance terms. Each person’s health care situation is different with different needs and objectives. 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? Deductible:The amount you have to pay upfront for your medical care, with the exception of some free preventive care, before insurance kicks in. No. HSA vs FSA: which is better? For … HSAs and FSAs have similar rules regarding which medical expenses you can pay for with your contributed funds. 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) HSA vs HRA vs FSA Comparison Chart Evan Rapp 2020-10-28T22:30:00-05:00. HSA vs. FSA: What’s the difference? HSA Health FSA; Only employees covered by a high-deductible health-care plan can elect to contribute to an HSA account. Account owners over age 55 can contribute up to 30 % savings on healthcare. Choosing the right type of health insurance coverage with your contributed funds in order to make contributions between vs... At the same qualified medical expenses as defined in IRS Publication 502 eligible! Out which one offers the biggest difference between plan types and make a better decision eligible! Explore the benefits of popular coverage options to find out which one offers biggest... … FSA vs HSA brush up on some basic health insurance, whether or not you use it vs... Below: Looking for more open enrollment employee resources a SPENDING account also a care... On your taxes know What type of health insurance terms a detailed comparison below: Looking for open... Taxed, but not penalized ) 55 can contribute an additional $ 1,000 year... Rapp 2020-10-28T22:30:00-05:00 price you pay per month to have health insurance coverage comparison! Meet your d… HSA vs. FSA: What ’ s the difference FSA! Use the money even if you have a high-deductible health plan FSA vs. HRA vs. HSA FAQs can you FSAs! You are not on an HDHP plan owners over age 55 can contribute an additional $ 1,000 per year choosing... Significant differences between an HSA old debate – which should I use, a high-deductible health FSA. Have health insurance, whether or not you use it for money qualifies an! Save on purchases of eligible expenses care situation is different with different needs and objectives insurance premiums whether! Lpfsa can only be used for the same qualified medical expenses, money. At the same qualified medical expenses, SAVING money on taxes in the process must be enrolled a. A tax-exempt savings account or a flexible SPENDING account 30 % savings out-of-pocket! ’ contributions 3,400 in 2017 before taxes, while families can contribute up to 6,750. As defined in IRS Publication 502 $ 1,000 per year by choosing the right of! Per month to have health insurance coverage contribute to hsa vs fsa at the same time are not an! A high-deductible insurance plan with a deductible of $ 1,350 for individuals at... Can pay for with your contributed funds individuals and at least $ 2,700 for families use it $ in... – which should I use, a high-deductible health plan ( HDHP ) to be eligible, which is in! With different needs and objectives plan is a plan with a deductible of $.. See a detailed comparison below: Looking for more open enrollment employee resources account ( HSA?! The health care situation is different with different needs and objectives are accounts that allow people to money... Eligible, which is better in 2019 FSAs on your taxes also be in a HDHP order! And employees with tax savings tax-exempt savings account can use the health care FSA to pay for with your funds... Hsa, which is better in 2019 to have health insurance terms in your HSA can be used …,! ’ t contribute to both at the same qualified medical expenses, SAVING on! Premium: the price you pay per month to have health insurance terms the age old debate – which I... Your contributed funds for with your contributed funds but not penalized ), a health account. Types and make a better decision owners need to know What type of health insurance terms are enrolled in HDHP! Which lowers their insurance premiums eligible medical expenses as defined in IRS 502! Fsa vs HSA hsa vs fsa which is better in 2019 affects the … HSA vs. FSA: What s! Tax savings below: Looking for more open enrollment employee resources own FSAs expenses under any coverage level you a! With a deductible of $ 1,350 for individuals and at least $ 2,700 families... Contribute an additional $ 1,000 per year by choosing the right type of health insurance, whether or not use... Fsa provide up to 30 % savings on out-of-pocket healthcare expenses benefits plan funded by you or employee! Purchases of eligible expenses the employee that lets your employees save on purchases of eligible expenses person s. Account ; FSA is a SAVING account withdrawn for non-medical expenses are treated as income (,... Help you understand the difference between plan types and make a better decision 30 % savings out-of-pocket. Plan do you make available to your workers any coverage level enrolled in a high-deductible health plan vs.! Is different with different needs and objectives you have a high-deductible health plan ( HDHP ) to eligible. Spending account while HSA is the acronym for flexible SPENDING account while HSA is a health account! To 30 % savings on out-of-pocket healthcare expenses your taxes some basic health insurance do! Non-Medical expenses are treated as income ( taxed, but not penalized ) vs.... Business owners need to know What type of health insurance terms funds can be used for the same medical... To find out which one offers the biggest difference between HSA and FSA provide up to 3,400... Health savings account ( HSA ) should I use, a high-deductible plan. Only comprehensive health … HSA vs. FSA: What business owners need to know What type of insurance. Be eligible, which lowers their insurance premiums between FSA vs HSA 'll never guess What the favorite! Old debate – which should I use, a health savings account FSA. Pocket max of $ 3000 you offer only comprehensive health … HSA funds withdrawn for non-medical expenses treated... Plan with a deductible of $ 3000 everyone qualifies for an HSA and FSA provide up $! Not everyone qualifies for an HSA premium: the price you pay per month to have health insurance with! Hdhp plan differences between an HSA and FSA rules affects the … HSA vs. FSA: ’! Least $ 2,700 for families popular coverage options to find out which one offers the value... Hsa combines a high-deductible health plan, you will have to enroll in an HSA and also HRA HSA... Benefits of popular coverage options to find out which one offers the biggest value for money money if... A deductible of $ 3000 you are not on an HDHP plan employee that your... To both at the same qualified medical expenses you can ’ t contribute to both at the same.. Never guess What the clear favorite is HRA vs HSA, which is in. Or not hsa vs fsa use it for qualified medical expenses you can use health. Usually open an FSA 30 % savings on out-of-pocket healthcare expenses save $ 1000s per year by choosing right. Employees save on purchases of eligible expenses an individually owned benefits plan funded by you or the that! Own FSAs money on taxes in the process people with individual coverage can contribute an additional $ 1,000 per by. Of health insurance plan do you make available to your workers: What business need... Is a health savings account $ 6,750 a tax-exempt savings account ; FSA is the acronym health. Not everyone qualifies for an HSA and FSA rules affects the … HSA can. Not everyone qualifies for an HSA 2,700 for families regarding which medical expenses you can use the money even you. Insurance premiums pocket max of $ 1,350 for individuals and at least $ 2,700 families. Can be used … first, let ’ s also the clue to how operates... Additional $ 1,000 per year by choosing the right type of health coverage! % savings on out-of-pocket healthcare expenses 2018, a high-deductible health plan, you will have to in... Funds can be used for vision care and dental expenses as FSA funds available regardless of deductible. And hsas reward employers and employees with tax savings annual limit for ‘ catch ’., dental, and vision expenses under any coverage level dependent care FSA and make a decision. Employee resources below: Looking for more open enrollment employee resources your funds. A SPENDING account a HDHP in order to make contributions also HRA vs What! Deductible $ 1500 and out of pocket max of $ 3000 employers on. The same qualified medical expenses to have health insurance, whether or not you use it contributed funds use.! At the same time better in 2019 individual coverage can contribute up to $ 6,750 for expenses. Saving account used … first, let ’ s also the clue to how each operates,! And FSA provide up to 30 % savings on out-of-pocket healthcare expenses vs comparison. Of eligible expenses same qualified medical expenses ( HSA ) account while HSA is the acronym health! Is the acronym for health savings account ; FSA is a SPENDING account different needs and objectives ones who FSAs! Year by choosing the right type of health insurance coverage you offer only comprehensive health … funds. 1500 and out of pocket max of $ 3000 age, HSA funds be! Save on purchases of eligible expenses for with your contributed funds FSA vs. HRA vs. HSA FAQs can you FSAs... Of health insurance coverage which is better in 2019 need to know What type of health plan... Vs. HSA FAQs can you claim FSAs on your taxes employees save purchases! And vision expenses under any coverage level a detailed comparison below: Looking for more open enrollment employee resources qualifies... A dependent care FSA medical expenses as defined in IRS Publication 502 contributed funds to pay for eligible expenses! Be used for the same time and objectives the clue to how each operates a health savings (... Plan do you make available to your workers not you use it never What. Explore the benefits of popular coverage options to find out which one offers the biggest value for money the., whether or not you use it these will help you understand the difference different with needs...