There are a number of variations between an HSA and FSA, together with possession, eligibility, advantages, and limitations. One of many fundamental variations is an HSA is owned by the person (you!), whereas an FSA is managed by the employer. 

Total, an HSA tends to have extra flexibility and better contribution limits. It additionally grants rollover in the event you don’t use all your funds by the tip of the yr. However, to have an HSA, you should be enrolled in a high-deductible well being care plan (HDHP). Some staff keep away from high-deductible plans due to the potential for some excessive out-of-pocket bills. 

Try the HSA and FSA comparability chart under to get extra particulars on how these choices differ.

It’s additionally necessary to notice in the event you depart your employer, you could hand over your FSA. The one exception is in the event you’re eligible to proceed it by Continuation of Well being Protection (COBRA).  

HSA vs. FSA {qualifications}

To be able to entry the advantages of HSAs and FSAs, you could meet a sure set of {qualifications}. 

For an HSA, you could: 

• Have a high-deductible well being plan (HDHP)
• Not be enrolled in different well being care plans (until permitted by the IRS) 
• Not be enrolled in Medicare
• Not be listed as a depending on another person’s tax return 

For an FSA, you could:

• Be employed by an employer who affords the profit
• Not be self-employed 

One of many main variations between HSA and FSA necessities is you don’t must be a part of an HDHP to have an FSA if it’s provided by your employer.