Health care
HSA vs FSA: which health account fits you, and how much to put in
Both accounts let you pay for medical costs with money that skips income tax, which works out like a discount on every prescription and copay. The catch is that they follow very different rules about who can open one and what happens to money you do not spend.
Tax figures on this page are for the 2026 tax year.
The two accounts at a glance
| Health savings account (HSA) | Health flexible spending account (FSA) | |
|---|---|---|
| Who can open one | Only people covered by an HSA-eligible high deductible health plan (HDHP) | Employees whose employer offers one |
| 2026 contribution limit | $4,400 self-only, $8,750 family | $3,400 per employee through salary reduction |
| Unspent money | Rolls over every year and stays yours | Use it or lose it, unless the plan offers a carryover (up to $680) or a grace period |
| Changing jobs | The account goes with you | Usually ends with the job |
| Investing | Often allowed once a minimum balance is reached | Not available |
| Money available | As it is deposited | The full yearly election, from the start of the plan year |
For 2026, a plan must have a deductible of at least $1,700 for self-only coverage or $3,400 for family coverage to count as an HDHP for HSA purposes, and out-of-pocket costs capped at $8,500 or $17,000. People 55 or older can contribute an extra $1,000 a year to an HSA.
Why the tax break matters
Money you put into either account through payroll skips federal income tax and, in most cases, Social Security and Medicare taxes. Most states follow the federal treatment, though a few tax HSA contributions. In practice, it works like a discount on medical costs equal to your tax rate.
Health account sizing calculator
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Sizing an FSA without losing money
Start with what you actually spent last year on deductibles, copays, prescriptions, glasses or contacts, and dental work. Add anything you know is coming, such as a planned procedure. If you are unsure, aim a little below your estimate; losing part of the account erases the tax benefit quickly. Remember that an FSA gives you the whole yearly amount from day one, which can help with a large expense early in the year.
When an HSA makes sense
An HSA pairs with a high deductible plan, so the first question is whether that plan suits you. HDHPs often have lower premiums but higher costs before the deductible. If you are generally healthy and can afford the deductible from savings, an HDHP with an HSA lets you save on premiums and build a tax-advantaged balance that rolls over indefinitely. If you expect regular care, compare the total yearly cost of each plan, premiums plus expected out-of-pocket costs, before deciding.
Some employers contribute to employees' HSAs. That money counts toward the yearly limit, so subtract it before choosing your own contribution.
Keeping it clean
Keep receipts or statements for every expense you pay from an HSA or FSA. FSA administrators may ask for documentation, and HSA owners must be able to show withdrawals were for qualified expenses if the IRS asks. Using HSA money for non-qualified expenses before age 65 generally means income tax plus a 20% additional tax.
Deadlines to put in your calendar
Elections for an FSA are usually made during open enrollment and generally cannot be changed mid-year unless you have a qualifying life event, such as marriage, a birth or a change in employment. Note your plan's last day to submit claims for the year, which can fall after the year ends.
Choosing your health account
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Questions people ask
Can I have both an HSA and an FSA?
Generally not a regular health FSA at the same time as an HSA, because a general-purpose FSA makes you ineligible to contribute to an HSA. Some employers offer a limited-purpose FSA for dental and vision expenses that can be paired with an HSA.
What happens to HSA money when I change jobs?
The HSA is yours. It stays with you when you leave a job, and unused money rolls over year after year. You can only add new money while you are covered by an HSA-eligible high deductible health plan.
What happens to unspent FSA money?
FSAs are generally use-it-or-lose-it, but employers may offer either a carryover of a limited amount, $680 for plan years beginning in 2026, or a grace period of up to two and a half months. Some offer neither. Your plan document says which.
What can I pay for with these accounts?
Qualified medical expenses such as deductibles, copays, prescriptions, many dental and vision costs and some medical supplies. IRS Publication 502 lists what counts.