HSA vs FSA: What's the Difference?
Both let you pay medical costs with pre-tax money. An HSA is yours forever, rolls over, and can be invested, but needs a high-deductible health plan. An FSA works with most plans but is owned by your employer and mostly use-it-or-lose-it.
| HSA | FSA | |
|---|---|---|
| Who qualifies | Only people on an HSA-eligible high-deductible plan | Anyone whose employer offers one |
| Unused money | Rolls over every year, no limit | Mostly forfeited at year end (small carryover or grace period if the plan allows) |
| If you change jobs | Account stays with you | Usually lost |
| Can be invested | Yes | No |
| Tax treatment | Tax-free in, growth, and out for medical costs | Tax-free in and out for medical costs |
| Contribution limit | Higher; set yearly by the IRS | Lower; set yearly by the IRS |
Bottom line
If you're eligible, an HSA is the stronger account — it doubles as a long-term savings account. Use an FSA for predictable yearly costs you're sure to spend.
Try the HSA Tax Savings Calculator