The short answer
A Flexible Spending Account (FSA) and a Health Savings Account (HSA) both let you set aside pre-tax dollars to pay for qualified medical expenses. That’s where the similarities end. The two accounts have different ownership, different eligibility rules, different deadlines, and very different long-term behavior.
The biggest practical difference: an FSA mostly expires every year. An HSA never does.
Side-by-side comparison
| Feature | Health FSA | HSA |
|---|---|---|
| Who owns the account? | Your employer | You |
| Eligibility requirement | Any employer-sponsored plan that offers it | Must be enrolled in a high-deductible health plan (HDHP) |
| 2026 contribution limit | $3,400 / employee | $4,300 self / $8,550 family |
| Catch-up (age 55+) | None | +$1,000 |
| Rollover | $680 max (if plan offers carryover) | Unlimited — rolls over forever |
| Deadline | Dec 31 (with optional 2.5-month grace period) | None |
| Portable across jobs? | No — usually forfeited | Yes — fully portable |
| Investable? | No | Yes (mutual funds, ETFs) |
| Tax advantage | Pre-tax payroll deduction | Triple tax-free: contributions, growth, qualified withdrawals |
| After age 65 | N/A | Withdraw for any purpose (taxed as ordinary income) |
Eligibility — what each one covers
For day-to-day spending, FSAs and HSAs cover the same list of qualified medical expenses under IRS Publication 502. If a product is FSA-eligible, it’s HSA-eligible. If it requires a Letter of Medical Necessity for one, it requires one for the other.
That means the same broad list applies to both: vision care, first aid supplies, OTC medications, sunscreen, pain relief therapy, mental health services, prescription copays, dental and vision exams, and a long list of less obvious items.
The eligibility list isn’t where these accounts differ — the rules around the money are.
Where they differ
1. Ownership and portability
An FSA is owned by your employer. If you leave the company, you usually leave the FSA balance behind, except for whatever you’ve already spent and submitted for reimbursement. There are limited exceptions through COBRA, but in practice, most FSA money is forfeited at separation.
An HSA is owned by you. The account is in your name at a bank or HSA custodian. If you change jobs, change health plans, retire, or stop being eligible to contribute, the HSA is still yours. Existing funds remain available for qualified medical expenses indefinitely.
2. Deadlines and forfeiture
FSAs follow the IRS “use it or lose it” rule. Most balances expire on December 31 of the plan year, with two optional extensions your employer can offer:
- A 2.5-month grace period (through March 15)
- Up to $680 in carryover to the next plan year
Anything beyond those extensions is forfeited back to the employer. See When Does My FSA Expire? for the full mechanics.
HSAs have no deadline at all. Money you contribute today is available 30 years from now if you don’t spend it. There’s no annual reset, no grace period, no forfeiture.
3. Eligibility to open one
To open an HSA, you must be enrolled in a qualified high-deductible health plan (HDHP) and not be covered by other disqualifying coverage (a spouse’s standard health plan, a regular Health FSA, Medicare, etc.).
To open an FSA, you just need an employer who offers one. There’s no health plan requirement.
This is the most common reason people end up with one or the other: their employer’s health plan options dictate which is available.
4. Investing
HSA balances above a custodian-set threshold (often $1,000–$2,000) can be invested in mutual funds, ETFs, or self-directed brokerage accounts, and the gains grow tax-free as long as withdrawals stay qualified. Many HSA users treat the account as a stealth retirement vehicle — contribute the max, invest aggressively, pay current medical expenses out of pocket, and let the HSA compound for decades.
FSA funds cannot be invested. They sit as cash with the administrator until you spend them.
5. Contribution limits
For plan years beginning in 2026:
- FSA: $3,400 per employee. If both spouses have access to an FSA, each can contribute up to the limit.
- HSA: $4,300 for self-only HDHP coverage, $8,550 for family HDHP coverage. Add $1,000 catch-up if you’re 55 or older.
HSA contributions can be made until the tax filing deadline of the following year (April 15, 2027 for the 2026 tax year), giving you flexibility to true up after the calendar closes. FSA contributions are payroll-deduction only and locked in at open enrollment unless you have a qualifying life event.
Can I have both?
Generally, no. If you enroll in a standard Health FSA — yours or a spouse’s — you become ineligible to contribute to an HSA, even if you’re on an HDHP.
The exception is the Limited-Purpose FSA (LPFSA), which restricts spending to dental and vision expenses only. LPFSAs are HSA-compatible and let HSA holders front-load dental and vision spending against pre-tax FSA dollars while preserving the HSA for everything else.
Some employers also offer a post-deductible FSA that becomes general-purpose only after you hit your HDHP deductible. This is also HSA-compatible.
Which one’s better for whom?
HSA wins for you if:
- You have access to an HDHP
- You can pay current medical expenses out of pocket and let the HSA grow
- You want long-term tax-advantaged savings on top of a 401(k) and IRA
- You expect to change jobs more than once in your career
FSA wins for you if:
- You don’t have an HDHP option
- You have predictable medical expenses (glasses, prescriptions, ongoing therapy, planned procedures) and can estimate annual spending accurately
- You want immediate access to your full annual election on day one of the plan year (FSAs front-load the entire election; HSAs only have what you’ve contributed so far)
The “use it or lose it” downside is real but manageable. If you have an FSA, plan your contribution conservatively, then use the balance tool in Q4 to spend down whatever’s left. Even 25% of $3,400 saved on taxes ($850+ in net spending power) is meaningful.
What if you don’t know which one you have?
Check your benefits portal or your most recent paystub:
- FSA contributions typically show up as “Health FSA” or “Medical FSA” on your paystub deductions
- HSA contributions show as “HSA” and the funds appear in a separate bank or custodian account (HealthEquity, Fidelity, Lively, etc.) you can log into directly
If you can log in to a separate financial account that holds the money, it’s an HSA. If you can only see your balance through your employer’s benefits portal, it’s an FSA.
Don’t leave money on the table either way
Whichever account you have, the spend-down logic is the same: every dollar you put in is pre-tax, and every eligible product you buy with it is effectively 22–37% off depending on your bracket. Open the balance tool to see what your remaining balance can buy, or browse eligible products by category if you’d rather plan it yourself.