What is the difference between a flexible spending account and a health savings account
Aspect Flexible Spending Account (FSA) Health Savings Account (HSA) Tax Advantages Contributions are made with pre-tax dollars, reducing taxable income for the year in which contributions are made. Contributions are tax-deductible, and qualified withdrawals for medical expenses are tax-free. Earnings can grow tax-free if used for eligible medical expenses. Ownership and Portability Typically owned by the employer, and funds may not be portable if the individual changes employers. Owned by the individual, providing portability even if changing employers. The account stays with the individual. Eligibility Requirements Available to employees through employer-sponsored benefit plans. Available to individuals covered by a high-deductible health plan (HDHP) and not enrolled in other health coverage, including Medicare. Contribution Limits Contributions are subject to annual limits set by the IRS. For 2022, the limit is $2,850 for health FSAs. Contributions are subject to annual limits ...