Comparing HSAs and Healthcare FSAs

Comparing HSAs and FSAs Comparing HSAs and Healthcare FSAs Health Savings Accounts (HSAs) and Healthcare Flexible Spending Accounts (HCFSA) are common types of reimbursement accounts offered by American Fidelity. These accounts allow you to set aside money for eligible medical expenses, while reducing your overall tax burden. Differences in HSAs and Healthcare FSAs Did You Know? 16% of total healthcare costs are paid out of pocket.1 Both HSAs and HCFSAs help pay for those out-of-pocket expenses using pre-tax dollars. 12021 Milliman Medical Index; May 2021, P9 American Fidelity Assurance Company SB-30650-0721 There are significant differences between these accounts. With an HSA, you own the account and can take it with you wherever you go, with funds that you can’t lose. Also — unlike a HCFSA — your funds are generally available in your account only as contributions are made, instead of from the beginning of the plan year. HSA HCFSA Eligibility Requirements Must have a qualified HDHP and no other disqualified health plan. Must be eligible under the terms of their employer’s plan. Availability of Funds Funds are available as contributions are made. The full election amount is available up front at the beginning of the plan year. Changing Contribution Amounts May change at any point during the year, subject to plan provisions. May be adjusted at open enrollment or with a qualifying change in employment or family status. Rollover Any unused balance always rolls over to the next plan year. With a few exceptions, HCFSAs are “use or lose” and you forfeit any unused balance at the end of the plan year. Connection to Employer It’s your account. You can take it with you wherever you go. Generally, you’ll lose your HCFSA with a change in employment. Effect on Taxes Contributions may be taken out of your paycheck pre-tax. Growth and distributions for eligible expenses are tax free. Contributions are taken out of your paycheck pre-tax. Distributions are tax free for eligible expenses. 16%