Health Savings Accounts
What is the difference between an HSA and an FSA?
An HSA (Health Savings Account) is available to people with HDHPs and has no use-it-or-lose-it rule — funds roll over year to year. An FSA (Flexible Spending Account) is available with any health plan and has a use-it-or-lose-it rule — most funds must be used by year-end. Both provide tax advantages for medical expenses.
Key Points
- HSA: available with HDHP only; funds roll over year to year
- FSA: available with any health plan; use-it-or-lose-it rule
- HSA: triple tax advantage (contributions, growth, withdrawals)
- FSA: tax-free contributions and withdrawals for medical expenses
- HSA: can invest funds; FSA: typically cannot invest funds