HSAs vs. FSAs: It’s no contest

If you’re thinking about enrolling in a Health Savings Account (HSA) or a Flexible Spending Account (FSA), you may want to do your research first. You may find neither option is ideal for you, but if you need one or the other, keep reading…

Are you eligible?

Anyone can qualify for an HSA if they have a high-deductible health plan (HDHP). These numbers have remained unchanged for the last couple of years and will stay the same for 2017. The single deductible has to be at least $1600, and the family deductible at least $2600. With an FSA, there is no eligibility requirement based on your deductible, but you can only have one if it’s offered by your employer. While you can’t have an HSA with a lower deductible, would you really need one in that situation? Maybe. Maybe not. Advantage: HSAs

How contributions work

With an HSA, you can contribute up to $3350 for single coverage and $6700 for family coverage in 2016. With an FSA, the IRS limits contributions to $2550. The amount you contribute can be changed at any point during the year with an HSA. With an FSA, you have to wait until the next open enrollment to change your contribution. Not cool. Advantage: HSAs

What happens to your money at the end of the year?

At the end of the year absolutely nothing happens with your HSA money. It gets rolled over and over and over, until you use it. With an FSA, you lose whatever is left at the end of the year. Bummer. Advantage: HSAs

What happens if you leave your job?

An HSA is a bank account owned by you and can follow you anywhere. An FSA belongs to your employer and you lose it if you change jobs. Advantage: HSAs

John Pettit

John Pettit

John Pettit is the Managing Editor for CUInsight.com. Web: www.cuinsight.com Details