Health Savings Account (HSA) vs. Flexible Spending Account (FSA)
Both health savings accounts (HSA) and flexible spending accounts (FSA) are ways to budget and allocate tax-free money that is used to pay for healthcare expenses. HSAs are only available for people who are covered by high deductible health plans, and money not spent in a given year rolls over to the following year. FSAs are offered by an employer and only $550 of money not spent can roll over to the following year.
If you are looking for another way to save money on health care expenses, Mira may be a great option for you and your family. For only $45/month, Mira members get access to low-cost urgent care, prescriptions, and lab tests. If you have an HDHP, Mira can help you pay for your medical expenses before you reach your deductible, and if you are considering an FSA, Mira is a way to save money without the risk of losing the money you put in your account at the end of the year.
Health Savings Account vs. FSA: Key Differences
Health savings accounts (HSA) and flexible savings accounts (FSA) are both ways that you can set aside money to pay for healthcare expenses. Some expenses that can be covered by money set aside in an FSA or HSA include copayments and coinsurance. There are several important differences between an HSA and FSA, which we outline in the table below.
Health Savings Account vs. FSA
Health Savings Account (HSA) | Flexible Spending Account (FSA) | |
|---|---|---|
| Who is eligible | Individuals with a high-deductible health plan | Individuals enrolled in a group health plan by an employer who offers FSA |
| 2021 contribution limit | Self: $3,600 Family: $7,200 | Self: $2,750 |
| Ownership of account | Individual and not tied to an employer | Employer and cannot be carried over to a new employer |
| Money rollover | Money not used rolls over to following year | Only $550 can roll over to the following year |
| Changing contributions | Can change at any time as long as you do not exceed limits | Can only be changed during open enrollment or if there is a change in employment or family situation |
| Penalty for removing funds from account | Can be taken out of the account for free after age 65. Before age 65, there is a 20% penalty for funds used for nonmedical purpose tax-deductible | Employees may not be able to use funds for nonmedical expenses depending on the employer. |
| Tax savings | Money put in this account is tax deductible or can be contributed from employer pre-tax | Money is contributed pre-tax from employer |
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Jacqueline graduated from the University of Virginia in 2021 with a B.A. in Global Public Health and is a current M.D. candidate at the Icahn School of Medicine at Mount Sinai. Jacqueline has been working for Mira since April 2020 and is passionate about the intersection of public health and medical care.