One key difference, however, is that HSA balances can roll over from year to year, while FSA money left unspent at the end of the year or after a designated grace period is forfeited. What is the difference between an HSA and a Healthcare FSA?īoth HSAs and FSAs allow you to pay for qualified medical expenses with pre-tax dollars.

A healthcare FSA covers all eligible medical expenses. It is intended to work in conjunction with an HSA. What is the difference between a healthcare FSA and a limited purpose FSA?Ī limited purpose FSA can only be used for vision and dental expenses. The Carryover option is available with healthcare and limited purpose FSAs. Department of the Treasury changed the “Use It or Lose It” rule, providing employers the ability to offer a Carryover option which allows for up to $500 of FSA balances remaining at the plan-year end to carry over for use during the next plan year. You may refer to the FSA eligible expenses tool on this site for a list of eligible and ineligible expenses. The account helps you budget for planned expenses such as deductibles, co-payments and prescriptions. You may set aside pre-tax dollars to cover eligible medical expenses that are not covered by any other type of insurance. What is a Healthcare Flexible Spending Account? To avoid losing any of the funds you contribute to your FSA, it’s important to plan ahead as much as possible to estimate what your expenditures will be in a given plan year.You can use pre-tax dollars to cover eligible work-related dependent care expenses for qualified dependents, or if you are married, while you and your spouse work or your spouse attends school full-time. This rule, established by the IRS as a component of tax-advantaged plans, is referred to as the “use-or-lose” rule. If you contribute dollars to a reimbursement account and do not use all the money you deposit, you will lose any remaining balance in the account at the end of the eligible claims period. – Over-the-counter medicine (prescription required)įor a full list of eligible expenses, go to /eligibleexpenses. Below are some examples of common eligible expenses: The IRS determines what expenses are eligible under an FSA.

Account information can be securely accessed 24/7 online and through the mobile app. Employees can use their card for eligible purchases everywhere Mastercard is accepted. – Easy Spending and Account Management: Employees will receive an Ameriflex Debit Mastercard linked to their FSA. That means you are increasing your take-home pay simply by participating! Let’s say you earn $40,000 a year and contribute $1,500 to an FSA so, only $38,500 of your income gets taxed. – Keep More Money: The funds are taken out of your paycheck “pre-tax” (meaning they are subtracted from your gross earnings before taxes) throughout the course of the year. – Save On Eligible Expenses: You can save up to 40% on thousands of eligible everyday expenses such as prescriptions, doctor’s visits, dental services, glasses, over-the-counter medicines, and copays. – Election Accessibility: You will have access to your entire election on the first day of the plan year. FSA coverage extends tax benefits to family members allowing the FSA holder to be reimbursed for medical expenses for themselves, their spouse, and their dependents. An employee enrolled in a Limited Purpose FSA is HSA-eligible.Īs a married couple, one spouse cannot be enrolled in an FSA at the same time the other is contributing to an HSA. An employee is also not HSA-eligible during an FSA Grace Period. However, you can contribute to an HSA and a limited purpose FSA, which only covers dental and vision expenses.Īs per IRS Publication 969, an employee covered by an HDHP and a health FSA or an HRA that pays or reimburses qualified medical expenses generally can’t make contributions to an HSA. You can’t contribute to an FSA and HSA within the same plan year. When you enroll in a Flexible Spending Account (FSA) you get to experience tax savings on qualified expenses such as copays, deductibles, prescriptions, over-the-counter drugs and medications, and thousands of other everyday items. Use the below information to determine if a Flexible Spending Account (FSA) is right for you and how to best take advantage of an FSA account.

Flexible Spending Accounts (FSA)Īn account for setting aside tax-free money for healthcare expenses. Please refer to the Enrollment Instructions page of this website, or pages 5 through 8 of your Benefits Booklet, for more information on how to self-enroll. Please contact the Human Resources department for more information and benefit effective dates. New employees working 30+ hours per week are eligible to self-enroll in benefits within 31 days of their date of hire online through Paylocity.

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