FSA (Flexible Spending Account) and an HSA (Health Savings Account)

Here’s a clear breakdown of the key differences between an FSA (Flexible Spending Account) and an HSA (Health Savings Account) to help you decide which might suit your needs best:
🧾 Tax Benefits & Eligibility
•     Both accounts let you contribute pre-tax dollars to pay for qualified medical expenses.
•     HSA: You must be enrolled in a high-deductible health plan (HDHP) to qualify.
•     FSA: Available through employers regardless of your health plan type.
💰 Contribution Limits (2025)
•     HSA: Up to $4,150 for individuals and $8,300 for families.
•     FSA: Up to $3,200 per employee.
🔄 Fund Rollover
•     HSA: Funds roll over indefinitely—you keep the money year after year.
•     FSA: Typically “use it or lose it”—you may lose unused funds at year-end. Some employers allow a small carryover (up to $660 in 2025).
📈 Investment & Growth
•     HSA: You can invest your balance in stocks, bonds, or mutual funds—earnings grow tax-free.
•     FSA: No investment options—funds are meant for short-term use.
🧍 Portability
•     HSA: It’s yours to keep even if you change jobs or retire.
•     FSA: Tied to your employer—you lose it if you leave the company.
🧮 Summary Table

Sources:
If you're planning for long-term medical expenses or retirement healthcare, an HSA offers more flexibility and growth potential. For short-term budgeting with predictable costs, an FSA might be simpler. Want help comparing based on your specific health plan or expenses?