Savings and Spending Accounts

The City of Chattanooga offers you two different types of spending accounts for you to invest your on a tax-free basis to pay for qualified medical expenses.

The flexible spending account (FSA) works similarly to a layaway account: you make an election at the beginning of the year and you have access to that entire amount on the first day of the plan year. You pay the money back in fixed amounts over the course of the year. Your enrollment in this type of plan is not tied to any particular medical plan; you can have an FSA even if you do not participate in the City's medical plan.

The health savings account (HSA) is an individually owned account that has more flexibility in terms of what you can invest; you can choose when you contribute to the account and how much.

This table can help you distinguish between the two:

  HSA FSA
What is it? Individual tax-exempt trust or custodial account used to pay for qualified medical expenses Group plan that allows you to set aside money on a pre-tax basis to pay for eligible medical expenses
Can unused funds remain in your
account from year to year?
Yes Rollover of $500 annually
Who can contribute to your account: You, your employer and third parties You and your employer
Are the funds portable? Yes Generally no
Can the funds be invested to
potentially grow?
Yes No
Can you use the funds for expenses other than qualified medical expenses? Yes, but taxes and penalties apply No
Will your account remain open if you switch jobs? Yes No
Can you make catch-up contributions? Yes No


 

  

Contact Information

Customer Service: 844.269.2583 (844.2MYBLUE)

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