Sewanee Benefits

Health Savings & Spending Accounts

These accounts help you save money on taxes while paying for health or dependent care expenses. This page explains how Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) work, how they are different, and how to decide which one may fit your situation best.

The simple version

HSA
Use an HSA if you enroll in the HSA-eligible medical plan and want an account you can keep, build, and use now or later for qualified health expenses.
FSA
Use an FSA if you want to set aside pre-tax money for eligible expenses during the year. FSAs can be helpful, but they work differently from an HSA and require a yearly election.

Which one fits me?

These examples are meant to help you think through common situations. They are not tax advice, but they can help you decide where to start.

I enrolled in the HSA-eligible medical plan
You want to pair your medical plan with an account that can help now and still be useful later.
Best place to start: HSA
The HSA is designed to work with this plan. Sewanee contributes to it, you can add your own money, and unused funds stay with you.
I chose a PPO plan and expect regular out-of-pocket costs
You expect to use funds this year for things like copays, prescriptions, glasses, dental work, or other eligible health expenses.
Best place to start: Health Care FSA
A Health Care FSA can help you pay those costs with pre-tax dollars during the year.
I pay for daycare or after-school care so I can work
Your main concern is dependent care, not medical spending.
Best place to start: Dependent Care FSA
This account is meant for eligible dependent care expenses so you can work or attend school full time.
I want to save for health care costs over time
You like the idea of keeping unused money and building a balance for future medical expenses.
Best place to start: HSA
The HSA is usually the better fit when long-term flexibility and rollover matter to you.

HSA vs. FSA

Who can use it?
HSA: only if you enroll in the HSA-eligible medical plan.
Health Care FSA: generally if you choose a PPO medical plan or even if you do not enroll in Sewanee medical coverage.
Dependent Care FSA: available separately for eligible dependent care expenses.
Who owns the money?
HSA: you do.
FSA: it is a yearly spending election tied to the plan year.
Does Sewanee contribute?
HSA: yes, for eligible employees enrolled in the HSA-eligible medical plan.
FSA: no University contribution; you elect the amount.
Does the money roll over?
HSA: yes, unused money stays in the account.
FSA: plan carefully, because unused money may be forfeited.
Can I change my election during the year?
HSA: yes, your payroll contribution can be started, changed, or stopped during the plan year.
FSA: generally only if you have a qualified status change.
What is it for?
HSA: qualified medical expenses now or later.
Health Care FSA: eligible medical, dental, and vision expenses during the year.
Dependent Care FSA: eligible dependent care expenses so you can work.

Health Savings Account (HSA)

An HSA is a savings account that belongs to you and is paired with the HSA-eligible medical plan. You can use it for qualified health expenses now or save it for future health care costs.
Who can enroll?
Employees enrolled in the HSA-eligible medical plan who meet HSA eligibility rules.
University contributions
Employee only = $100/month
Employee + spouse = $150/month
Employee + child(ren) = $150/month
Family = $200/month
Your contributions
You can make, change, or stop your payroll contributions during the plan year.
What happens to unused money?
It stays in your account and rolls over from year to year.
Who keeps the account?
You do. The HSA is yours even if you leave Sewanee, retire, or change plans.
Can it grow?
Yes. Unused money can stay in the account, earn interest, and eventually be invested when your balance is large enough.

Flexible Spending Accounts (FSA)

FSAs let you set aside pre-tax money for eligible expenses during the year. Sewanee offers two separate FSA options: a Health Care FSA and a Dependent Care FSA.
Health Care FSA
Use pre-tax dollars for eligible medical, dental, and vision expenses such as copays, deductibles, coinsurance, prescriptions, orthodontia, eyeglasses, and more.
Dependent Care FSA
Use pre-tax dollars for eligible dependent care expenses, such as daycare, after-school programs for children under 13, or certain elder care expenses, so you can work.
Annual election
You must actively elect your FSA each year. Elections do not carry over automatically.
Use it carefully
Plan carefully because unused money remaining in the account may be forfeited.
Health Care FSA timing
The full annual election is generally available at the start of the plan year.
Separate elections
Health Care FSA and Dependent Care FSA are separate. You enroll in each separately, and funds are not interchangeable.

Important rules to know

You cannot contribute to an HSA if you are enrolled in other disqualifying health coverage, Medicare, or if you are claimed as a dependent on someone else’s tax return.
You cannot use the Health Care FSA if you are contributing to an HSA.
HSA contributions can be changed during the year. FSA elections generally can only be changed if you have a qualified status change.
FSA elections do not continue automatically from year to year. You must elect them again each year if you want them.
Claims for reimbursement should be submitted by the applicable plan deadline. Plan carefully so eligible expenses are submitted on time.

Common questions

Click a section below to view common questions and answers.

Choosing between the HSA and FSA
How do I choose between the HSA and the Health Care FSA?
Start with your medical plan choice. If you enroll in the HSA-eligible medical plan, the HSA is the savings account designed to go with that plan. If you want a Health Care FSA instead, that generally fits best with a PPO option or no Sewanee medical coverage.
What is the biggest difference between an HSA and an FSA?
The HSA is your personal account and unused money stays with you. The FSA is a yearly spending election that must be re-elected each year and should be used carefully during the plan year.
Which one is better if I expect to spend more this year?
That depends on your medical plan choice and whether you want long-term savings or more immediate year-by-year spending support. The Health Care FSA may feel easier for near-term predictable spending, while the HSA has stronger long-term value because the money stays with you.
HSA questions
What is an HSA?
An HSA is a savings account that belongs to you and is paired with the HSA-eligible health plan. You can use it for qualified medical expenses now or save it for future health care costs.
Who can enroll in an HSA?
You must be enrolled in the HSA-eligible medical plan and meet HSA eligibility rules.
How much does Sewanee contribute to my HSA?
Sewanee contributes monthly based on your coverage tier: $100 employee only, $150 employee + spouse, $150 employee + child(ren), and $200 family.
Can I contribute my own money too?
Yes. You can contribute your own money through payroll, and you can make, change, or stop those contributions during the plan year.
Do I lose my HSA money at the end of the year?
No. Unused HSA money rolls over from year to year and stays in your account.
What happens to my HSA if I leave Sewanee?
You keep it. The account is yours, including any University contributions already deposited.
Can I use my HSA for dental and vision expenses?
Yes, as long as the expense is eligible.
Can I use my HSA money right away?
Yes, but only to the extent money has actually been deposited into your account.
Can I invest my HSA?
Yes, once your balance is large enough, the account can grow beyond simple spending use and may be invested.
Health Care FSA questions
What is a Health Care FSA?
A Health Care FSA lets you set aside pre-tax money to pay for eligible medical, dental, and vision expenses during the year.
What can I use a Health Care FSA for?
Common examples include copays, coinsurance, deductibles, prescriptions, orthodontia, glasses, and other eligible medical, dental, and vision expenses.
Are all of my Health Care FSA funds available right away?
Yes. The full annual election is generally available at the start of the plan year, even though payroll deductions occur over time.
Do I have to enroll every year?
Yes. FSA elections do not carry over automatically from year to year.
Do unused Health Care FSA dollars roll over?
Plan carefully. Unused money remaining in the account may be forfeited.
When do I need to submit claims?
Claims should be submitted by the applicable plan deadline. Be sure to review the current year’s deadline instructions carefully.
Can I change my Health Care FSA election during the year?
Generally only if you experience a qualified status change.
Dependent Care FSA questions
What is a Dependent Care FSA?
A Dependent Care FSA lets you use pre-tax money for eligible dependent care expenses so you can work.
What kinds of expenses can it be used for?
Common examples include daycare, after-school programs for children under age 13, and certain elder care expenses that allow you to work or attend school full time.
Do I have to enroll every year?
Yes. Like the Health Care FSA, it must be actively elected each year.
Can I have a Dependent Care FSA even if I do not enroll in Sewanee medical coverage?
Yes. It is separate from your medical election.
Are the Health Care FSA and Dependent Care FSA interchangeable?
No. They are separate elections, and funds cannot be transferred between them.
Eligible expenses and account rules
What types of expenses are usually eligible for an HSA or Health Care FSA?
Common examples include eligible medical, dental, and vision expenses such as copays, deductibles, coinsurance, prescriptions, glasses, contacts, and orthodontia.
Can I use HSA or FSA money for dental and vision care?
Yes, if the expense is eligible.
Can I have both an HSA and a Health Care FSA?
No. If you are contributing to an HSA, you should not also use the Health Care FSA.
Who administers these accounts?
Pinnacle is the administrator for HSA and FSA support for the plan period beginning July 1, 2026.

Need help?

If you are not sure whether the HSA or FSA fits your situation, or you want help thinking through your election before you enroll, please reach out.