What's the Difference Between an FSA and an HSA?

An FSA (Flexible Spending Account) and an HSA (Health Savings Account) are both tax-advantaged accounts that let you set aside pre-tax dollars to pay for qualified medical expenses, but they have some key differences. An HSA is only available to people enrolled in a high-deductible health plan, and the money rolls over year after year with no deadline to spend it. An FSA is generally available through any employer-sponsored health plan, but it comes with a use-it-or-lose-it rule — funds that aren't used by the end of the plan year are forfeited, with some employers allowing a small carryover or grace period. HSA contributions are also yours to keep even if you change jobs, while FSA balances are typically tied to your employer. If you qualify for an HSA, it's often the more flexible option, especially since unused funds can be invested and used for medical expenses in retirement.