Compare the Health Savings Account (HSA) and the Flexible Spending Account (FSA).
Active employees are encouraged to fund their medical expenses by setting up either a Health Savings Account (HSA) or a health care Flexible Spending Account (FSA). Both accounts allow members to deposit and withdraw money tax-free for qualified medical expenses.
| Question | Health Savings Account (HSA) Plan | Flexible Spending Account (FSA) |
|---|---|---|
| Which plan must a subscriber enroll in to have this account? | Health Savings Account (HSA) - HSA Plan | Flexible Spending Account (FSA) - PPO 750 or PPO 1250 |
| Who contributes? | HSA Plan - Subscriber and MCHCP | FSA - Subscriber |
| What is MCHCP's contribution? | HSA Plan - (Active Employees Only) Subscriber Only: $500 All Other Levels: $1000 | |
| What happens at the end of the year? | HSA Plan - Unused balance rolls over. | FSA - Subscriber can incur expenses up to March 15 the following year. Any balance remaining at the end of this grace period is forfeited; budget conservatively. |
| What happens if a subscriber leaves their job? | HSA Plan - Subscriber keeps their account and may continue to use the funds for qualified expenses. | FSA - Subscriber may submit expenses for reimbursement until April 15 of the following year. Expenses must have been incurred during time of employment. |
| What is the reimbursement process? | HSA Plan - Use HSA debit card for qualified expenses. | FSA - Use FSA debit card and/or submit a claim form and provide documentation to MoCAFE. Claims may be submitted via mail, fax, mobile app or online. |
| What are the tax benefits? | HSA Plan - Contributions are tax-deductible. Interest is tax-free. Withdrawals for qualified medical expenses are tax-free. |
FSA - Contributions are taken from paycheck on a pre-tax basis (before taxes are withheld). Claim reimbursements for qualified medical expenses are tax-free. |
Contribution rules for HSAs are complex. Members should consult a tax advisor about individual circumstances and the maximum annual contribution. MCHCP does not provide individual tax advice.
Transitioning from an FSA to an HSA
Subscribers cannot be in a health care FSA and be eligible for an HSA at the same time. Subscribers may, however, participate in the HSA and a Dental/Vision FSA (explained in the MoCAFE State of Missouri Enrollment Guide found here).
In order to receive HSA contributions from MCHCP, a subscriber’s health care FSA must first have a zero balance. Subscribers with a remaining balance in their FSA on December 31 will wait longer to receive their HSA contribution the following year. Subscribers have until April 15 (the following year) to claim expenses through their FSA. MCHCP will make its annual contribution to the HSA in April rather than in January. If a subscriber does not have an outstanding balance in their health care FSA on December 31, MCHCP will make its annual contribution in January.
| Date | Description |
|---|---|
| December 31 | FSA must have a zero balance in order to receive the MCHCP HSA contribution in January |
| January | MCHCP contribution will be deposited into HSA if FSA has a zero balance on December 31 |
| March 15 | Date of service deadline for any FSA remaining funds to be used for qualified expenses. Funds that are not used by this date will be forfeited |
| April | MCHCP contribution will be deposited into HSA if there were remaining FSA funds on December 31 |
| April 15 | Deadline to submit claims for remaining FSA funds used by March 15th. Funds that are not claimed by this date will be forfeited |
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