| Eligibility to contribute | You do not have to enroll in a specific insurance plan in order to be eligible for the FSA. | You are eligible only if you enroll in consumer-directed health plan with a health savings account (CDHP/HSA) and are not enrolled in Medicare. |
| Annual Contribution dollar limits | The current annual election maximum is $2,600 per employee. If you and your spouse both have an FSA, you may each set aside up to the annual maximum amount (i.e. there is no household maximum). | The single contribution limit is $3,400 and the family contribution limit is $6,750. These limits include any contributions made by your employer.
The year you turn 55 you are eligible to contribute an additional $1,000 to the above contribution maximums. |
| Account Ownership | Your FSA is set up and owned by your employer. | Your HSA is set up for you when you enroll in the consumer-directed health plan. You own the health savings account. |
| Funding | Employee salary reduction, but funded with your full annual election on your first day of coverage each plan year. | Can be funded by the individual through employee salary reduction dollars, by your employer, or by others (e.g. family members). Funds are available as they are contributed. |
| Use it or lose it | Yes, any funds you do not spend in your FSA are forfeited to the program administrator. | No, any unused funds in your HSA at the end of the plan year are yours to keep and roll over from year to year. |
| Qualified medical expenses | Qualified medical expenses as defined in Section 213(d) of the internal revenue code (available at www.irs.gov.)
Not permitted
Any type of health insurance premium | Qualified medical expenses as defined in Section 213(d) of the internal revenue code (available at www.irs.gov.)
Retiree health insurance premiums (except Medicare supplement plans)
COBRA premiums
Long term care insurance premiums
Health insurance premiums if receiving unemployment
Not permitted
Any other type of health insurance premium |
| Option to change contributions | You can only change your election/deduction amount if you experience certain qualifying events such as marriage, divorce, birth of a child, etc. | You must contact your personnel, payroll or benefits office to find out how often you can change your election amount. |
| How your income taxes are affected | Employee's contributions are taken out before taxes and reduces taxable gross income. | Employee's and employer's contributions are taken out before taxes and reduces taxable gross income. |