HSA vs FSA: which one is right for you?
HSAs and FSAs both let you pay medical costs with pre-tax dollars, but the rules — rollover, ownership, eligibility — are very different.
An HSA (Health Savings Account) and an FSA (Flexible Spending Account) both let you set aside pre-tax money for medical expenses. The big differences: who owns the money, what happens to leftovers at year-end, and whether you can keep contributing if you change jobs.
Quick comparison
- Eligibility — HSA requires you to be enrolled in a qualifying HDHP. FSA is available with most plans (no HDHP required).
- Ownership — HSA is yours forever. FSA is owned by your employer; you forfeit it if you leave (with some COBRA exceptions).
- Rollover — HSA balance rolls over fully, year after year, for life. FSA generally doesn't (small carryover or grace period only).
- Contribution limits (2026) — HSA: $4,400 self / $8,750 family. FSA: $3,300 (Healthcare FSA).
- Investment — HSA funds can be invested in mutual funds once you exceed a minimum balance. FSA funds cannot.
- Triple tax advantage — Only the HSA offers this: tax-free contributions, tax-free growth, tax-free withdrawals for qualified medical expenses.
When the HSA is the clear winner
- You're enrolled (or could be) in an HDHP.
- You don't expect to spend the contribution this year — the money rolls over and can be invested.
- You want a tax-advantaged retirement supplement. After age 65, HSA funds can be withdrawn for any purpose (taxable as income, like a traditional IRA).
When the FSA is the right call
- You're not in an HDHP and can't switch.
- You have predictable expenses (orthodontics, glasses, planned surgery) and want to pay them with pre-tax dollars.
- Your employer offers a Dependent Care FSA — separate from the Healthcare FSA, with its own $5,000 limit (2026) for childcare or eldercare.
FAQ
- Can I have both an HSA and an FSA?
Not a regular Healthcare FSA — that disqualifies your HSA. You can pair an HSA with a Limited-Purpose FSA (dental/vision only) or a Dependent Care FSA.
- What happens to my HSA if I change jobs?
You keep it. The HSA belongs to you, not your employer. You can roll it to another HSA custodian if you prefer.
- What happens to my FSA if I leave my job mid-year?
You typically forfeit the unspent balance. You can continue an FSA via COBRA in some cases, but it rarely makes financial sense to do so.