FSA vs. HSA: Which One Should You Get in 2025?

Key Takeaways

HSAs roll over indefinitely and you own them, while FSAs expire annually and belong to your employer.

You need a high-deductible health plan for an HSA, but FSAs work with any health plan.

The choice of FSA vs. HSA depends on your health needs. FSAs give immediate access while HSAs build long-term savings.

What Is an FSA?

A health savings account allows you triple tax savings on medical expenses. You put in pre-tax dollars, your money grows tax-free, and withdrawals for health care costs aren't taxed either. You own the account, so it stays with you when you change employers. Your balance rolls over year after year, letting you build savings for future medical needs or retirement health care costs.

What Is an HSA?

A flexible spending account (FSA) is an employer-sponsored account that uses pre-tax money for medical expenses. Your employer owns it, which means you can't take it with you if you leave your job. Most plans require you to spend your balance by year-end or forfeit leftover funds, though some employers allow a small carryover. You can pair an FSA with any health insurance plan.

Difference Between an FSA and an HSA

The difference between an FSA and an HSA comes down to ownership, rollover rules and eligibility. FSAs work with any health plan but expire annually, while HSAs require high-deductible plans and let you keep funds indefinitely. Pick the wrong one and you could lose hundreds at year-end.


Who owns it	Your employer	You
Rollover	Up to $660 (2026) or 2.5-month grace period	Full balance rolls over every year
Job change	Lose remaining funds	Account follows you
Eligibility	Any health plan	High-deductible health plan only
2025 contribution limit	$3,300 (individual), $6,600 (family)	$4,300 (individual), $8,550 (family)
Catch-up (55+)	Not available	Extra $1,000 annually
Investment options	None	Can invest funds like a 401(k)
Tax benefits	Contributions reduce taxable income	Triple tax advantage: contributions, growth and withdrawals all tax-free

CAN YOU HAVE AN FSA AND AN HSA?

According to the IRS, you can't contribute to both a general-purpose FSA and an HSA at the same time.

However, you can pair an HSA with a Limited Purpose FSA that only covers dental and vision expenses. You can also have a Dependent Care FSA alongside an HSA, similar to how some people coordinate multiple health insurance policies.

Pros and Cons of HSA vs FSA

Understanding the pros and cons helps you choose the right account for your health care spending. HSAs offer long-term flexibility and investment potential, while FSAs provide immediate access to funds. Both save you taxes, but they differ when it comes to flexibility, eligibility and how long you can keep your money.


Pros	You can access your full annual election amount on day one of the plan year, which is perfect for covering immediate medical expenses or procedures. Individuals can contribute up to $3,300 in 2025, and if your spouse has a separate FSA, you can jointly contribute $6,600 for household expenses. Your full contribution is available immediately at the start of your plan year, even before you fully fund the account. Lower or no minimum deductible requirements compared to HSAs	You own the account permanently. Your money rolls over year after year with no expiration, and you keep it even when you switch jobs or retire. You can contribute up to $4,300 for individual coverage or $8,550 for family coverage in 2025, with an extra $1,000 catch-up contribution if you're 55 or older. Your HSA grows tax-free when you invest it, creating a retirement health care fund. You avoid all taxes on qualified medical expense withdrawals. Your HSA stays with you when you change jobs or become temporarily unemployed.
Cons	You typically lose unused funds at year-end, though some plans allow up to $660 to carry over to 2026. You must re-elect and contribute annually, as it doesn't automatically continue. Your employer owns the account, so you lose it when you leave your job and need new health insurance. You can't have both a general-purpose FSA and contribute to an HSA simultaneously.	You must enroll in a high-deductible health plan with at least a $1,650 deductible for individual coverage or $3,300 for family coverage in 2025, according to the IRS. High upfront costs before insurance coverage begins can strain your budget. You can't contribute if you're enrolled in Medicare or claimed as someone's dependent. Investment options and account fees vary by provider.

Which One Should You Get?

Your health plan type, expected medical expenses and financial goals determine which account fits your needs. Employers often choose for you, but if you can pick between both accounts, these situations help clarify the better option.

Choose an HSA if:	Choose an FSA if:
You have a high-deductible health plan (required for HSA eligibility)	You have a traditional health plan with lower deductibles
You want to save for retirement since funds roll over indefinitely	You have predictable medical costs this year like braces or planned surgery
You're healthy now and prefer building long-term health savings	You'll use the funds within 12 months for copays, prescriptions or regular treatments
You want to invest HSA funds and grow them tax-free	You prefer your employer to contribute and don't want investment complexity
You can afford to pay current medical bills out of pocket	You need immediate help covering routine health expenses

Bottom Line

Pick an HSA if you're healthy, have a high-deductible plan and want your money to grow tax-free for decades. FSAs make sense when you'll spend the money this year on predictable medical costs. You can't have both general-purpose accounts simultaneously, so match your choice to how soon you'll need the funds.

Difference Between HSA and FSA: FAQ

When comparing FSA vs HSA accounts, questions about eligibility rules, ownership and rollover policies arise frequently. We've answered these frequently asked questions below:

What are an HSA and an FSA?

Health savings accounts (HSAs) are medical savings accounts you own that require enrollment in a high-deductible health plan. Flexible spending accounts (FSAs) belong to your employer and work with any insurance plan type. You can use pre-tax dollars from either account to cover qualifying health care costs.

How do I know if I have an FSA or an HSA?

Check your pay stub for HSA or FSA deductions, or review your benefits enrollment documents from your employer. If you need a high-deductible health plan for eligibility, you likely have an HSA. Your HR department can confirm which account type you have and provide your account details if you can't locate them yourself.

Is an HSA the same as an FSA?

HSAs and FSAs aren't the same. You own your HSA permanently with unlimited rollovers, while your employer owns your FSA and funds typically expire annually. HSAs require high-deductible health plans; FSAs work with any plan. Both offer tax-free medical expense savings, but HSAs provide more flexibility and long-term growth potential.

Does an FSA or an HSA roll over?

Your HSA balance rolls over completely every year with no expiration, and you keep it when changing jobs or retiring. FSAs typically expire annually, though some plans let you carry over up to $660 to 2026 or offer a 2.5-month grace period to spend remaining funds. Check your employer's specific FSA rules.

What happens to my HSA or FSA when I change jobs?

Your HSA stays with you permanently when you change jobs, and you keep the entire balance. You lose your FSA when leaving your employer since they own the account. This ownership difference makes HSAs more flexible for people who change jobs frequently, as your funds and coverage continue without interruption.

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.

Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!

Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.

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sources

IRS.gov. "Tax forms and instructions." Accessed October 6, 2025.
IRS.gov. "IRS: Healthcare FSA reminder: Employees can contribute up to $3,300 in 2025." Accessed October 10, 2025.