Updated: October 30, 2025
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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.
A flexible spending account (FSA) is an employer-sponsored account that lets you set aside pre-tax money for medical expenses. Your employer owns the account, so you can’t take it with you if you leave your job.
Most FSAs require you to use the funds within the plan year, although some employers allow a small carryover or grace period. You can pair an FSA with most types of health insurance plans.
A health savings account (HSA) provides triple tax benefits for medical expenses. You contribute pre-tax dollars, your balance grows tax-free, and withdrawals for qualified health costs aren’t taxed.
You own the account, so it stays with you even if you change employers. Unused funds roll over each year, helping you build savings for future medical needs or health expenses in retirement.
The main differences between an FSA and an HSA come down to ownership, rollover rules and eligibility. An FSA works with most health plans but usually expires at the end of the year, while an HSA requires a high-deductible plan and lets you keep your balance indefinitely. Choosing the right one matters because picking the wrong account could mean losing unused money 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 |
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.
Knowing the pros and cons of each account can help you decide which one fits your needs best. An HSA gives you long-term flexibility and the chance to grow your money through investments, while an FSA offers quick access to funds for current medical expenses. Both help you save on taxes, but they differ in flexibility, eligibility and how long you can keep the money.
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The right account for you depends on your health plan, medical needs and financial goals. In many cases, your employer will decide which option is available, but if you have the choice, here’s how to figure out which one might work better for you.
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 |
An HSA is a great choice if you’re generally healthy, have a high-deductible plan and want to save money that can grow tax-free over time. An FSA works better if you expect regular medical expenses and plan to use the money within the year. You can’t have both general-purpose accounts at once, so choose the one that fits how and when you’ll use your funds.
Comparing an FSA and an HSA often brings up questions about eligibility, ownership and rollover rules. Here are some of the most common questions and answers to help you understand how each account works.
A health savings account (HSA) is a medical savings account you own, available only if you’re enrolled in a high-deductible health plan. A flexible spending account (FSA) is set up and owned by your employer and can be used with most health insurance plans. Both let you use pre-tax dollars to pay for qualified medical expenses.
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.
HSAs and FSAs aren’t the same. You own your HSA permanently and your balance rolls over from year to year. Your employer owns your FSA and in most cases, the funds expire at the end of the plan year.
HSAs require a high-deductible health plan, while FSAs can be used with any plan. Both offer tax-free savings for medical expenses, but HSAs provide more flexibility and long-term growth potential.
Your HSA balance rolls over completely every year with no expiration and you keep it when changing jobs or retiring. FSAs usually 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.
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!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.
