US benefits HSA and FSA Healthcare savings

HSA and FSA: Benefit Accounts Explained

Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA) are employer benefit accounts that let you set money aside for healthcare costs. Understanding which you have — and how to use it — is a practical financial wellness step.

Rolls over year to year

HSA — Health Savings Account

An HSA is a personal savings account for qualified medical expenses. It is available only when you are enrolled in a High-Deductible Health Plan (HDHP).

Funds roll over

Unused money stays in your account indefinitely — there is no "use it or lose it" rule. The balance can grow over time.

You own the account

An HSA is yours even if you change jobs or health plans. The funds go with you.

Invests for the long term

Many HSAs allow you to invest your balance once it reaches a threshold. A healthy HSA balance can serve as a dedicated healthcare reserve into retirement.

After age 65

Once you turn 65, HSA funds can be used for any purpose — not just medical costs. This makes a funded HSA a useful long-term financial cushion.

Use it or lose it

FSA — Flexible Spending Account

An FSA is an employer benefit account for healthcare or dependent care expenses. It is available with most health plan types — not just HDHPs.

Annual spending window

Most FSA funds must be used within the plan year. Some employers offer a grace period or allow a small carryover — check your plan details.

Employer-owned account

Unlike an HSA, the FSA stays with your employer. If you leave your job, unused funds are generally forfeited.

Dependent care FSA

A separate FSA type that covers childcare, after-school care, or adult dependent care — useful for working parents or carers.

Key action: estimate carefully

Because unused funds expire, base your election on realistic annual healthcare spending — not the maximum allowed.

Quick comparison

HSA vs FSA at a glance

Feature	HSA	FSA
Requires HDHP	Yes	No
Funds roll over	Yes — indefinitely	Generally no
Account ownership	You own it	Employer owns it
Portable if you leave job	Yes	No
Can invest balance	Yes (at threshold)	No
Dependent care version available	No	Yes

What qualifies

Common eligible expenses

Both accounts cover most out-of-pocket medical costs. Common examples include:

Doctor and specialist visits (copays)
Prescription medications
Dental treatment and orthodontics
Vision care and prescription eyewear
Mental health therapy (copays)
Lab tests and medical equipment
Over-the-counter medicines and first aid
Menstrual care products

Check IRS Publication 502 for the full list of qualifying medical expenses.

Practical steps

Getting started at open enrollment

Check what your plan offers

Review your benefit summary to confirm whether your health plan is HSA-eligible (HDHP) or FSA-only.

Estimate your healthcare costs

Look at last year's spending on prescriptions, copays, and dental. Use this as your election baseline for an FSA.

Elect your contribution amount

During open enrollment, choose your annual contribution. This is deducted from each paycheck in even amounts throughout the year.

Use your benefit card

Most HSA and FSA accounts come with a debit card. Use it at pharmacies, clinics, and dentists — keep receipts in case of an audit.

More information

Questions about your specific plan?

Your HR or benefits team can confirm which accounts you are eligible for and what your employer contributes. The Healthcare.gov site and IRS Publication 969 also provide detailed, authoritative guidance on HSA and FSA rules.

Healthcare.gov FSA guide