4. What’s the difference between the Health Care Flexible Spending Account (FSA) and the Health Savings Account (HSA)?

The way the Health Care FSA and the HSA work is largely the same — you contribute money to your account through automatic, before-tax payroll deductions, then use these tax-free dollars to pay for eligible health care expenses.

However, there are some important differences. For example:

  • The HSA is only available to [CDHP] members, while the Health Care FSA is available to anyone who does not have an HSA.
  • With an HSA, your money never expires and is always yours to keep. The Health Care FSA, on the other hand, is a "use it or lose it" account — [if no carryover: you will lose any amount remaining in your FSAs at the end of the calendar year.] [If carryover: Up to $500 of unused funds remaining in your account at the end of the calendar year may be carried over to the next calendar year, but leftover amounts exceeding $500 will be forfeited.]
  • With the HSA, you can change your contribution amount at any time. With the Health Care FSA, you cannot change your contribution amount outside of Open Enrollment unless you experience a qualifying life event.

To learn more, visit Saving/spending accounts.