Is FSA Eligible the Same as HSA? Understanding the Differences

Many people often confuse flexible spending accounts (FSAs) and health savings accounts (HSAs) because they both offer tax advantages for healthcare expenses. However, there are significant differences between the two that consumers should be aware of when considering their healthcare savings options.

FSAs and HSAs are both tax-advantaged accounts that allow individuals to save money for qualified medical expenses, but they differ in terms of eligibility, contribution limits, rollover rules, and account ownership. Here is a breakdown of the key differences:

• Eligibility: FSAs are offered by employers and may have eligibility requirements set by the employer, while HSAs are available to individuals who have a high-deductible health plan (HDHP).
• Contribution Limits: FSAs have an annual contribution limit set by the employer, while HSAs have higher contribution limits set by the IRS.
• Rollover Rules: FSAs have a
  

  Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) are popular tools for managing healthcare costs, but they come with different rules. Understanding these differences can help you choose the best option for your financial health.