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HSA or FSA? Three Tips To Know The Difference

If you aren’t sure if you have a health savings account (HSA) or a flexible spending account (FSA), you’re not alone. HSAs and FSAs are different vehicles for setting aside money for medical expenses, but can be easily confused. However, there are a few key characteristics to help you keep them apart. (Note: The tips below assume you have one or the other.)

If the money in your account rolls over from year to year, you have an HSA.

If you’ve calculated how much money you’ll spend on medical expenses for a certain year, you probably have an FSA. That’s because FSAs are subject to the use-it-or-lose-it rule, which means money left in your account at the end of the year is forfeited (with the exception of a $500 rollover amount added by the IRS in 2013).

In contrast, any money in your HSA that isn’t used rolls over to the following year and grows interest. HSAs are individually owned and go with you if you leave your employer.

If you’re not on a high deductible health plan (HDHP), you have an FSA.

An individual is only eligible for an HSA if they’re on an HSA-eligible high deductible health plan. For 2019, the IRS defines a HDHP as having a minimum annual deductible of $1,350 for single coverage and $2,700 for family coverage.

Note that while both accounts are paired with health insurance plans, they’re administered separately from your health insurance provider.

If you’re investing money in your account, you have an HSA.

One key difference between the HSA and FSA is that money in an HSA can be invested, much like a 401(k). The purpose of an FSA is for an individual to contribute tax-free dollars for current medical expenses. The purpose of the HSA is to help you not only set aside tax-free contributions for current medical expenses, but also for your future healthcare expenses in retirement. The investment component of the HSA helps you do that.

For more information on health savings accounts, visit

Author: Ginny Latham


2018 HSA contributions can be made until April 15th. Individuals, select "Contribute to 2018" when scheduling a contribution. Employers, select "File Upload" when scheduling a contribution, then note "Fiscal Year 2018" in your file template.