HSA and HCFSA Comparison Chart
(Internal Revenue Code section 223)
|Health Care Flexible Spending Accounts (HCFSA)
(Internal Revenue Code section 125)
|What is the purpose of having one of these accounts?
|An HSA is a saving account that is owned by an individual. It allows you to save and invest pretax dollars. These funds can accumulate over time and the growth is tax-free. You can then spend the funds, tax-free, on qualifying medical, dental and/or vision qualified expenses, now and into retirement.
|An HCFSA is a spending account that allows you to use pretax dollars for qualifying medical, dental and/or vision expenses incurred within the plan year for you and your federal tax dependents.
|Is it available to university employees?
Yes; you must be enrolled in the CU Health Plan-High Deductible as the primary member.
|Yes; participation in a medical plan through your employer is not required. You must re-enroll each Open Enrollment to participate.
|May I enroll in both HSA and HCFSA?
|No; you may not contribute to a health savings account and participate in a health care flexible spending account.
|When can I enroll?
|At any time, as long as you are enrolled in CU Health Plan - High Deductible.
|During Open Enrollment and certain qualifying events.
|Who is eligible to contribute?
|Who administers the account?
|What are the maximum contribution amounts for the 2023-24 plan year?
$4,150 individual coverage
$3,050 per employee
|Is this a pre-tax contribution?
|Can contributions be used to pay for health care premiums?
|No; exceptions are: COBRA, health care premiums while receiving unemployment compensation, long-term care insurance and Medicare (premiums for Medicare supplemental plans are NOT allowed).
See IRS publication 969.
|Can the unused contribution be rolled over?
|Yes; the HSA is a true savings account, designed to accumulate and be invested. This account can serve as an income stream to pay for qualifying medical expenses tax-free, well into retirement.
|No; a participant must incur qualifying medical expenses by Sept. 15 after the end of year plan year (June 30) and submit reimbursement claims by Nov. 15. Any money remaining in the account after these deadlines will be forfeited.
|Can I take my contributions with me if I switch jobs?
|Can I withdraw the funds for non-qualified health care expenses?
|Yes; the IRS will impose a 20 percent penalty in addition to income taxation on all qualifying expenses. Penalty-free withdrawals are allowed once you turn age 65 or in the event of a disability or your death. These funds will be subject to income taxation.
See IRS publication 969.
|No; funds cannot ever be withdrawn for non-qualifying expenses.
|Are there IRS rules to remember?
|Yes; IRS maximums are calculated on a calendar-year basis. Consult your tax advisor if you have another HSA account.
|Yes; IRS maximums are calculated on a calendar-year basis. Consult a tax advisor if you have had another FSA account in the same calendar year.
|Are there any fees charged?
|Typically HSA accounts have fees associated with them; however, as an eligible CU employee, the fees are paid by CU. Note: If you become ineligible or terminated, you are responsible for the fees.
|Do the account contributions accrue interest?
|Can a surviving spouse set up an account through CU?
|Not through CU. Retirees and surviving spouses can set up a post-tax account with any financial institution as long as they are enrolled in a qualified high-deductible plan, and not enrolled in Medicare.
|Can PERA members participate if they're within 3-5 years of retirement?
|Yes; the health savings account does not affect your highest average salary calculation.
|Yes; however, participation will affect your highest average savings calculation.
|Do I have to make contributions to the account throughout the year, or can I make a lump sum contribution?
|While you may make lump sum contributions, by default, your annual HSA allocations are divided and deducted equally from the paychecks you’ll receive for the remainder of the plan year. However, you may make changes monthly (subject to payroll deadlines).
|Your total annual allocation is divided by the number of pay periods remaining in the plan year. Lump sum contributions are not allowed.
|If I have immediate eligible expenses, can I be reimbursed up to my annual allocated amount?
|No; employees will be reimbursed up to the current account balance.
|Yes; total plan-year contributions are available the first day of the plan year.