HSA vs FSA
With High Deductible Health Plans (HDHP) funding trending in the recent decade, there are helpful tax-advantaged savings tools that can help employees out. But just how many employees understand the difference between an HSA(Health Savings Account) vs an FSA(Flex Savings Account)?
Facts: Only 11% could correctly identify all HSA attributes which may explain why 33% of employees enrolled in an HDHP have not opened up an HSA according to the JAMA Network website published in July 2020.
Below is a simplified chart comparing HSAs vs FSAs.
It pays to fund an HSA
Some people who are eligible for HSAs don’t participate or don’t max out their contributions, because they don’t fully understand how these plans work. But if you pass up the opportunity to capitalize on an HSA.
Currently, you can contribute up to $3,500 per year to an HSA as an individual, and up to $7,000 for a family. If you’re 55 or older, you can put in an extra $1,000 on top of whichever limit applies to you. Also, know this: Sometimes employers fund HSAs on their employees’ behalf, so see if that’s a benefit you’re entitled to. Though the sum your employer puts in will count toward your annual limit, it’s effectively free money to help you tackle the potentially monstrous cost that is healthcare, both now and in the future.
If you still are unsure which savings plan best suits your small business, contact your licensed insurance broker for advice. To download this entire document as a PDF, click here: Open Enrollment eBook
Is your HSA compliant? Which pre-tax qualified HSA, FSA, HRA spending card is right for you? Please contact our team at Millennium Medical Solutions Corp (855)667-4621 for immediate answers. Stay tuned for updates as more information gets released. Sign up for the latest news updates.
This Compliance Overview is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.