Financial Calculators and Articles - What Are the Differences Between an HSA and FSA

As of 10-16-25

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are both tax-advantaged accounts that help individuals manage healthcare costs, but they have several key differences. Here’s a breakdown of the differences between an HSA and an FSA:

Eligibility

HSA: To qualify for an HSA, you must be enrolled in a High Deductible Health Plan (HDHP). You cannot be claimed as a dependent on someone else’s tax return and cannot have other health coverage that is not an HDHP.
FSA: FSAs are offered by employers, and eligibility generally depends on the employer’s plan. There is no requirement to be enrolled in a specific type of health insurance.

Contribution Limits

HSA: For 2026, individuals can contribute up to $4,400, and families can contribute up to $8,750. If you're age 55 or older, you can make an additional catch-up contribution of $1,000.
FSA: For 2026, the contribution limit is estimated to be $3,350 per year. Employers can set lower limits, and there are no catch-up contributions allowed for FSAs.

Fund Ownership

HSA: The account is owned by the individual. Funds contributed to an HSA roll over year to year, and the account stays with you even if you change employers or leave the workforce.
FSA: The account is owned by the employer. Unused funds may not roll over to the next year (although some plans allow a limited rollover or grace period).

Tax Benefits

HSA: Contributions are tax-deductible, the account grows tax-free, and withdrawals for qualified medical expenses are tax-free.
FSA: Contributions are made with pretax dollars, reducing your taxable income. Withdrawals for qualified medical expenses are also tax-free.

Use of Funds

HSA: Funds can be used for qualified medical expenses at any time, including after you turn 65 when it can also be used for non-medical expenses (with taxes due).
FSA: Funds must be used within the plan year (or grace period, if applicable). If you don't use the funds, you may lose them (often referred to as use it or lose it).

Portability

HSA: They are portable, meaning you can take the account with you if you change jobs or retire.
FSA: Generally not portable, as they are tied to your employer.

Investment Options

HSA: Many HSAs offer investment options, allowing you to invest your contributions for potential growth over time.
FSA: FSAs typically do not offer investment options; the funds are meant to be used within the plan year.

Other Considerations

HSA: You can contribute to an HSA even if you do not use your health plan's benefits for services, as long as you have the HDHP.
FSA: FSAs often have a claims process that requires proof of expenses for reimbursement.

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