Health Care Flexible Spending Accounts are similar to HSAs in that you can use pre-tax dollars to pay for eligible medical, dental and vision expenses. Because an FSA can be used to pay for very similar expenses as an HAS, the IRS will not allow employees to have both types of accounts during the same plan year. This does not impact your ability to enroll in the Dependent Care portion of the FSA, just the Heath Care.
Flexible Spending Account (FSA) | Health Savings Account (HSA) |
|
|---|---|---|
| Eligibility requirements | No eligibility requirements | Eligibility requirements include having a HDHP medical plan |
| 2025 contribution limit | $3,300 per employee | $4,300 individual/ $8,550 family |
| Catch-up contributions | No | $1,000 per year if you are 55 or older |
| Who owns the account? | Employer | Employee |
| Changes to contribution | Only for qualifying life events. | Changes may be made throughout the year. |
| Debit card available? | Yes | Yes |
| Balance carry over (or rollover) | Plan has a 90 day run out period to submit claims during the plan year. | Yes, unused funds carry over to the following year. |
| Portability and forfeiture | Not portable. You lose any unspent money in an FSA when employment is terminated except if you are eligible to continue through COBRA. | Yes. HSA balance is not forfeited when you change employers or health plans. |
| Access of funds | You can access the full elected amount at the beginning of the plan year. | You can only access funds which have been deposited into the account. |
| Proof of expenses required? | Yes | No, however, you should keep all documentation to substantiate the expense to the IRS. |
| Non-medical expenses | FSA funds can only be used for medical expenses. | HSA funds can be used for non- health related distributions and are included as gross income and subject to a 20% penalty if under age 65. |
| Is interest earned on the account? | No | Yes, amount varies by financial institution |
| Effect on taxes (varies by state) | Contribution are pretax and distributions are untaxed. | Tax-free contributions when you contribute, investment gains and withdrawals for qualified expenses. |
Explore all Benefits