TAKING THE PAIN OUT OF HEALTH INSURANCE

FSA vs HSA: What’s the Difference?


August 14, 2017

Understanding the Basics of HSAs and FSAs

Just because both small and large business owners can have an easier time when it comes to providing their employees with health insurance does not mean choosing the right plan is easy. In your search for the perfect plan for your business and your employees, you might come across Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA). To make the best choice for everyone involved, you have to know the difference between the two, which is where Sackett Insurance comes in.


HSA Breakdown 

One of the first things to know about HSAs is your employees only qualify for them if they already have a 
high-deductible health plan. These HSAs have a bit more freedom in the form of allowing the account holder to rollover any unused account balances to the next year. As of 2017, plan contributions are limited to $3,400 for individuals and $6,750 for families. If an employee with an HSA plan were to change jobs, her or his account would follow. In regards to taxes, HSA plan contributions are tax-deductible. Account holders are also able to have their contributions taken out of their pay pretax. 

FSA Breakdown 

As of 2017, there are no eligibility requirements associated with FSAs. Unlike HSAs, account holders have to 
use the entirety of the balance in their account before the end of the year, otherwise, they lose whatever remains. Plan contributions are limited to $2,600, and employees have to stay with your and your company if they want to keep their account. Any contributions made to an FSA are pretax, and all distributions are untaxed. 

Helping Your Employees Decide 

Your employees are likely to ask you for a bit of guidance on how much they should contribute. It’s best to recommend they start with making sure they have enough to take care of their deductible, co-payments, doctor’s visits, the cost of medication and any treatments or surgeries they might have planned in the future. Because there’s no accounting for medical emergencies, it is also a good idea to recommend to your employees that they save a bit extra. 

You should also know that sometimes employers contribute funds to their employee’s FSA and HSA plans, so decide if you would be willing to do so. It could be a great way to attract well-qualified employees and keep the employees you currently have. 

To learn more about FSAs and HSAs, do not hesitate to 
contact Sackett & Associates insurance Services here. You are also free to like us on Facebook, find us on LinkedIn and subscribe to our blog.


Share This Post

Taking The Pain Out Of Health Insurance

We make it simple to find the right insurance plans for your needs

In just a few quick steps.

Comments


Posts You Might Also Like


A group of people are sitting around a table looking at a tablet.
By Sackett Insurance Services March 26, 2025
Health insurance brokers help people find affordable coverage. Learn how they simplify choices, lower costs, and improve access to healthcare.
Three wooden figures of a family standing next to each other on a wooden table.
By Sackett Insurance Services March 7, 2025
Discover the key health insurance trends for 2025, from AI advancements to expanded telehealth and mental health coverage. Stay ahead of the changes!
A group of people holding red umbrellas in the rain.
By Sackett Insurance Services February 19, 2025
Discover how insurance brokers simplify coverage, save time, and provide expert guidance to help you find the best policies for your needs.
A pink heart with a smiling face is surrounded by hearts and coins.
By Sackett Insurance Services February 12, 2025
Discover how to choose the right health insurance plan by assessing your needs, comparing costs, and understanding coverage for smarter, informed decisions.
A person is holding a tablet with the word benefit on it.
By Sackett Insurance Services January 27, 2025
Discover how Sackett Insurance’s employee benefits software simplifies compliance, enhances efficiency, and boosts California businesses with tailored programs.
A man is showing his empty pockets.
By Sackett Insurance Services January 11, 2025
Learn how a health insurance broker can help you understand out-of-pocket maximums and choose the best plan to minimize costs while ensuring comprehensive coverage.
Share by: