Do you know the benefits of a health savings account (HSA) vs. a flexible spending account (FSA)? Check out the comparison table below to see which one is best for you.
Which Tax-Advantaged Health Care Account Could Benefit You?
Tax-advantaged plans
Health Savings Account (HSA) | Flexible Spending Account (FSA) | |
|---|---|---|
Health Savings Account (HSA) If you’re enrolled in the CDHP, you can use an HSA to pay medical and prescription costs tax free while investing in your retirement.[1] | Flexible Spending Account (FSA) If you’re in Health1 or Health2, you can use a Health Care FSA to pay medical costs tax free. In any of the plan options, use a Dependent Care FSA to pay for child or elder care.[1] | |
Tax Advantages | Health Savings Account (HSA) HSAs are “triple tax-advantaged” plans:
| Flexible Spending Account (FSA) Contributions are tax deductible and reduce your taxable income.
Withdrawals for eligible medical expenses are tax free.[1] |
Company Contributions | Health Savings Account (HSA) ERIE makes a yearly tax-free contribution to your account. | Flexible Spending Account (FSA) ERIE does not contribute. |
Rollover Growth | Health Savings Account (HSA) Your unused balance rolls over each year and continues to grow. | Flexible Spending Account (FSA) FSAs are "use it or lose it."
The unused balance does not roll over each year. |
Portable | Health Savings Account (HSA) You keep the money forever.
Your HSA stays with you if you leave ERIE, retire or change insurance. | Flexible Spending Account (FSA) An FSA does not go with you if you leave ERIE or retire. |
Investment Opportunity | Health Savings Account (HSA) Invest your savings in a mutual fund to grow tax-free interest and supplement your other retirement plans. Use your HSA to pay medical expenses now and in retirement, tax free. | Flexible Spending Account (FSA) Because the account does not roll over or move with you, you can't invest FSA funds for the future. |
Claims Administrator: HealthEquity | HSA Website:healthequity.com | Phone: 1-866-346-5800
Claims Administrator: HealthEquity | FSA Website:healthequity.com | Phone: 1-877-924-3967
HSA[2] | Health Care FSA | Dependent Care FSA | |
|---|---|---|---|
Available with these plan options: | HSA[2] CDHP | Health Care FSA Health2 | Dependent Care FSA CDHP |
What you can contribute each year:[3] | HSA[2] Employee only: Up to $4,300 | Health Care FSA Up to $3,200 (pre-tax) | Dependent Care FSA Up to $5,000 (pre-tax)[4] Access funds as they accumulate. |
What ERIE contributes each year: | HSA[2] Employee only: $750 HSA seed money pro-rated based on hire date. | Health Care FSA $0 | Dependent Care FSA $0 |
Can be used for: | HSA[2] Eligible out-of-pocket expenses under the health, dental or vision care plans. | Health Care FSA Eligible out-of-pocket expenses under the health, dental or vision care plans. Includes over-the-counter medicines and menstrual care products. | Dependent Care FSA Eligible dependent daycare expenses. |
If you don't use it by the end of the plan year: | HSA[2] Your unused balance rolls over and continues to grow. | Health Care FSA Your remaining balance is forfeited. | Dependent Care FSA Your remaining balance is forfeited. |
If you leave ERIE or retire: | HSA[2] The account goes with you. Keep your HSA funds even if you change employers or health plans. | Health Care FSA Your remaining balance is forfeited. | Dependent Care FSA Your remaining balance is forfeited. |
Investment options: | HSA[2] Once your account reaches $1,000, invest in mutual funds to grow your savings. Use it for medical expenses tax-free before or after retirement. | Health Care FSA None | Dependent Care FSA None |