Both FSAs and HSAs are pre-tax accounts to which employees contribute part of their income, and elections for both must be made every year during benefits enrollment! They can be used for a variety of expenses not covered by insurance. The major distinctions between the two are that an FSA can be used by those enrolled in the PPO plan, while an HSA is established for employees with the High Deductible Health Plan. They cannot be used together. Read More
FSA: Two Types
Employees can contribute to an optional health care FSA and/or a dependent care FSA. These expenses can include copays for prescriptions and doctor visits, and many others! Throughout the year, you may submit a claim for those expenses to get reimbursed with the tax-free dollars from your FSA account. With the Healthcare FSA, a debit card is available for healthcare expenses which makes covering expenses quick and easy
A dependent daycare account may be a good options for employees who need custodial care for an eligible dependent so that the employee and spouse can work (or go to school full-time). If your spouse also has a flexible spending account, you and your spouse may both allocate the maximum $2,650 amount to each of your health care FSAs and a combined total of $5,000 to your dependent daycare FSAs. As you incur healthcare or dependent day care expenses throughout the year, you may submit a claim for those expenses to get reimbursed with tax-free dollars from your FSA account
HSA: Triple Tax Incentive
In addition to putting in your own money, OUHSC will make an annual contribution to the account as well. This money can be used to pay for doctor’s visits, prescription costs and many other medical expenses. HSAs are triple-taxed advantaged as contributions are made tax-free, earnings are not taxed, and reimbursements for eligible expenses are tax-free.
- An FSA is an optional benefit - employees must select an FSA option and establish a contribution amount every year. An HSA is set up for an employee and the OUHSC contribution is added. HSA users must still make contribution elections every year.
- FSA funds are "use it or lose it" -- leftover money at the end of the year will not roll over to the next plan year. An HSA accumulates money over time and is transferable if or when you leave the university.
- The total amount of your FSA contribution is available on January 1 of the plan year, while HSA funds accumulate over the year.
Whichever account you utilize, it's important to keep track of your annual healthcare costs! This allows you to confidently choose how much to contribute to either an FSA or HSA. Remember, FSA fund do not roll over to the next year. HSA funds do and can accumulate over time.