See go/Pretax-Benefit-Accounts for a comprehensive overview and outline of key differences between an HSA and FSA. Otherwise, see below for a brief overview.
Health Savings Account (HSA)
An HSA is a type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. Allowed expenses include deductibles, copayments, coinsurance, and some other expenses. You’re only eligible for an HSA if you enroll in the Anthem gHIP plan, which is High-Deductible Health Plan (HDHP).
Healthcare Flexible Spending Account (FSA)
An FSA is an arrangement through your employer that lets you pay for many out-of-pocket medical expenses with tax-free dollars. Allowed expenses include insurance copayments and deductibles, qualified prescription drugs, insulin, and medical devices. You must re-elect an FSA each year and can decide how much you want to contribute to an FSA from your paycheck, up to a limit set by the IRS.
If you’re enrolled in an Anthem gHIP plan, the only healthcare FSA you can elect is a Limited Purpose FSA (LPFSA) since you’re also participating in an HSA due to your employer’s automatic funding. An LPFSA is like a standard healthcare FSA, however, funds can only be used toward qualified vision and dental care expenses prior to meeting your annual deductible. After you’ve met your deductible, funds can be used toward all other qualified medical expenses.
Dependent Care Flexible Spending Account (DCFSA)
A DCFSA is an arrangement through your employer that lets you set aside money on a pre-tax basis to pay for qualified dependent care expenses while you and your spouse or domestic partner (if applicable) are gainfully employed or attending school full-time. Allowed expenses include preschool, summer day camp, before/after school programs, child or elder care, and some other expenses. You must re-elect a DCFSA each year and can decide how much you want to contribute to an FSA from your paycheck, up to a limit set by your employer.