{"id":4492,"date":"2023-08-18T20:34:00","date_gmt":"2023-08-19T03:34:00","guid":{"rendered":"https:\/\/www.soundcu.com\/?p=4492"},"modified":"2025-11-06T11:59:23","modified_gmt":"2025-11-06T19:59:23","slug":"hsas-vs-fsas-the-similarities-differences","status":"publish","type":"post","link":"https:\/\/www.soundcu.com\/blog\/hsas-vs-fsas-the-similarities-differences\/","title":{"rendered":"HSAs vs. FSAs: The Similarities & Differences"},"content":{"rendered":"
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HSAs vs. FSAs: The Similarities & Differences<\/h1>\n

As inflation touches nearly every facet of our lives, healthcare costs have been impacted in a big way. In the United States, spending on healthcare grew 2.7%<\/a> in 2021, reaching $4.3 trillion overall, which breaks down to $12,914 per person, according to the Centers for Medicare & Medicaid Services.<\/p>\n

Unfortunately, those costs will likely only grow as we age. Which is why it\u2019s vital for us to tuck away as much as possible, as strategically as possible during our working years. There are a few ways we can do this, including using Health Savings Accounts (HSAs)<\/a> for both short-term needs and long-term needs, and health care Flexible Spending Accounts (FSAs) for short-term ones only.<\/p>\n

It\u2019s important to know the difference because, in general, you have to choose. You can\u2019t use both an HSA and a health care FSA simultaneously, although if you have an FSA for dependent care expenses, they can overlap. Here\u2019s a look at the biggest differences between the accounts and which may work best for you.<\/p>\n

The Main Differences<\/h2>\n

The biggest difference between a healthcare-focused FSA and an HSA is that an HSA rolls over from year-to-year while an FSA doesn\u2019t. That means people with an FSA must \u201cuse it or lose it,\u201d and only put a certain amount of cash into the account they know they\u2019ll spend within a calendar year. HSAs don\u2019t have this regulation, so you can invest up to the allotted dollar limit every single year until you\u2019re ready to use it.<\/p>\n

So why isn\u2019t everyone jumping on the HSA bandwagon? Not everyone qualifies. To be eligible, you must have a high deductible health insurance plan. For 2023, that\u2019s defined as a health plan with an annual deductible of not less than $1,500 for individual coverage or $3,000 for family coverage, according to the IRS, noting that annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) don\u2019t exceed $7,500 for individuals or $15,000 for family coverage. You can get an HSA through your employer (although the account is owned by the individual and it\u2019s portable \u2014 you can take it with you if you leave your job) or you can open one on your own. Eligibility for an FSA means working for an employer who offers one.<\/p>\n

What They Have in Common<\/strong><\/h3>\n