Compare your HSA vs FSA
Enter your open-enrollment numbers. The HSA is capped at 2026 IRS limits ($4,400 self-only / $8,750 family, plus $1,000 catch-up at 55+); the FSA at $3,400.
A plan offers one or the other, never both. Check your plan documents.
Federal marginal rate. State tax and payroll-tax savings are not modeled.
Applied to the HSA balance only. FSA money cannot be invested.
Results update automatically as you change inputs. Educational estimates — not financial or tax advice.
Your 5-year verdict
Total financial value over 5 years: ending account balance plus cumulative income-tax savings on contributions.
Tax-savings breakdown (5 years)
Pre-tax contributions save you 22% of every dollar contributed.
5-year projection
HSA balance growth vs cumulative FSA forfeitures, year by year.
Rollover vs forfeiture simulator
Slide your expected yearly medical spending. The HSA always rolls over — the question is how much of your FSA gets forfeited to use-it-or-lose-it.
Each bar: money lost to use-it-or-lose-it at that spending level. HSA forfeiture is always $0 — it rolls over by law.
The HSA triple tax advantage
No other US account gets all three. A 401(k) gets the first two; a Roth IRA gets the last two. Only the HSA gets the full set.
Tax-free money in
Contributions through payroll skip federal income tax — and usually Social Security and Medicare tax too. Direct contributions are deductible.
Tax-free growth
Interest, dividends, and investment gains inside the HSA compound with zero tax drag, year after year. FSA money cannot be invested at all.
Tax-free money out
Withdrawals for qualified medical expenses — now or 30 years from now — are never taxed. Keep receipts and you can reimburse yourself decades later.
Three worked examples
Step-by-step, using the same math as the calculator above.
Example 1 — The family that maxes out (HSA wins big)
Setup: Family coverage, 22% bracket, $5,000/year medical bills, HSA $7,000 employee + $1,000 employer seed, 5% growth, medical bills paid from the HSA. FSA alternative: $3,400 with carryover.
- HSA yearly funding: $7,000 + $1,000 = $8,000 (under the $8,750 family limit).
- Year-by-year HSA balance after paying $5,000 in bills: $8,000 → $11,150 → $14,457.50 → $17,930.38 → $21,576.89.
- HSA tax savings: $8,000 × 22% × 5 years = $8,800. HSA 5-year value: $21,576.89 + $8,800 = $30,376.89.
- FSA: $3,400/year fully spent on the $5,000 bills, nothing forfeited. Tax savings: $3,400 × 22% × 5 = $3,740.
Verdict: HSA wins by $26,636.89 over 5 years — the balance compounds and nothing is ever forfeited.
Example 2 — The healthy single filer (forfeiture trap)
Setup: Self-only, 12% bracket, $800/year medical bills. FSA election: $2,500 with carryover. HSA alternative: $2,000/year, 4% growth.
- FSA year 1: $2,500 − $800 spent = $1,700 unused → $680 carries over, $1,020 forfeited.
- Years 2–5: $2,500 + $680 carryover − $800 = $2,380 unused → $1,700 forfeited per year. Five-year forfeiture total: $7,820.
- FSA tax savings: $2,500 × 12% × 5 = $1,500. FSA 5-year value: $1,500 − $7,820 = −$6,320.
- HSA: balance grows to $7,299.59 after paying bills, plus $1,200 tax savings = $8,499.59.
Verdict: HSA wins by $14,819.59. Over-electing an FSA with low medical bills destroys value — money is forfeited, not rolled over.
Example 3 — When the FSA wins (January surgery)
Setup: Priya needs a $3,400 surgery in January. FSA election: $3,400. HSA: $4,400/year contributed evenly ($367/month).
- FSA: the full $3,400 election is available on January 1 (the uniform coverage rule), so the surgery is covered immediately with pre-tax dollars.
- HSA: only ~$367 has accumulated by January. Priya pays most of the surgery out-of-pocket and waits months to reimburse herself.
- The FSA also wins by default whenever you are not HSA-eligible — no HDHP, or you are covered by a spouse's general-purpose FSA or Medicare.
Verdict: the FSA wins on timing and eligibility. Big, certain, early-year expenses — or no HDHP — are the FSA's home turf.
Methodology & 2026 IRS limits
How the numbers are computed
- HSA projection: yearly contribution = min(your input, IRS cap) + min(employer seed, remaining cap). Balance evolves as By = (By−1 − medical paid) × (1 + g) + contribution — contributions are modeled at year-end (conservative).
- FSA projection: election = min(your input, $3,400). Each year: unused funds above the carryover cap ($680) or above the 2.5-month grace window are forfeited.
- Tax savings: contributions × your marginal bracket. Employer HSA seed is also tax-free income to you, so it counts too. State taxes and payroll-tax (FICA) effects are not modeled — both accounts usually save FICA via payroll.
- 5-year value: ending balance + cumulative tax savings. Forfeited FSA dollars are subtracted at face value.
- Assumptions disclosed: same contribution and same medical expenses every year; expenses constant; growth applies to HSA only; no fees; grace-period coverage approximated as 2.5/12 of annual expenses.
2026 IRS limits used
| Item | 2026 | Source |
|---|---|---|
| HSA contribution — self-only | $4,400 | IRS Revenue Procedure 2025-19 |
| HSA contribution — family | $8,750 | |
| HSA catch-up (age 55+) | $1,000 | |
| HDHP minimum deductible | $1,700 self / $3,400 family | |
| HDHP out-of-pocket maximum | $8,500 self / $17,000 family | |
| Health FSA employee limit | $3,400 | IRS Revenue Procedure 2025-32 |
| FSA carryover maximum | $680 (20% of limit) |
Limits verified October 2026 from IRS Revenue Procedures 2025-19 and 2025-32 as reported by EY Tax News, Sequoia, and Alera Group. If the IRS updates figures, this page's vintage is labeled 2026 — always confirm with your plan documents.
HSA vs FSA — frequently asked questions
Straight answers to the questions people actually ask during open enrollment.
Which is better, an HSA or an FSA?
It depends on your health plan and medical spending. An HSA usually wins for people with a high-deductible health plan who can save and invest: money rolls over forever, grows tax-free, and stays yours if you change jobs. An FSA can win when you are not HSA-eligible, or when you have large, predictable medical costs early in the year — the full FSA election is available on day one. Use the 5-year comparison above with your own numbers instead of guessing.
Can you have an HSA and an FSA at the same time?
You cannot contribute to an HSA while covered by a general-purpose health FSA — the FSA counts as disqualifying coverage. The exception is a limited-purpose FSA, which only pays for dental and vision expenses; you may hold that alongside an HSA. Many employers offer a limited-purpose FSA specifically for HSA participants.
What happens to unused FSA money?
Most FSAs follow use-it-or-lose-it: money you do not spend by the plan year end (or the end of the grace period, up to 2.5 months) is forfeited to your employer. Some plans instead allow a limited carryover — for 2026 the IRS caps it at $680. Your plan can offer a grace period or a carryover, but never both.
Does HSA money roll over or expire?
HSA money never expires and always rolls over — there is no use-it-or-lose-it rule and no annual spending deadline. Your balance compounds year after year, and after age 65 you can even withdraw for non-medical expenses penalty-free (you just pay ordinary income tax, like a traditional IRA). This rollover is the single biggest structural advantage over an FSA.
What are the HSA contribution limits for 2026?
For 2026, the IRS allows up to $4,400 for self-only HDHP coverage and $8,750 for family coverage (IRS Revenue Procedure 2025-19). If you are 55 or older you can add a $1,000 catch-up contribution. Employer contributions count toward the same limit. To be eligible your plan must be a qualified HDHP: minimum deductible $1,700 self-only or $3,400 family for 2026.
What is the FSA contribution limit for 2026?
For plan years beginning in 2026, employees can contribute up to $3,400 of pre-tax salary to a health FSA (IRS Revenue Procedure 2025-32), up $100 from 2025. If your plan has the carryover option, you may carry up to $680 of unused funds into the next year. Employers may set a lower limit than the IRS maximum.
What is the triple tax advantage of an HSA?
An HSA is the only account with all three tax benefits: (1) contributions are pre-tax (or tax-deductible), (2) growth and investment earnings are tax-free, and (3) withdrawals for qualified medical expenses are tax-free. A traditional 401(k) gives you the first two; a Roth IRA gives you the last two. Only the HSA gives you all three.
What is the difference between an FSA grace period and an FSA rollover?
They are two different safety nets and a plan can offer only one. A grace period gives you up to 2.5 extra months into the next year to spend last year's FSA funds. A carryover (often called a rollover) lets you move a limited amount — up to $680 for 2026 — into the next plan year with no time limit. Amounts above the carryover cap are forfeited. Check your plan documents to see which one you have.
Can I invest my HSA money?
Yes — once your HSA provider's cash threshold is met (often $1,000 or $2,000), most providers let you invest the rest in mutual funds, ETFs, or similar options, and all growth stays tax-free. You cannot invest FSA money; it earns nothing and must be spent. Over decades, invested HSA dollars are why the account is sometimes called a stealth retirement account.
What medical expenses are HSA and FSA eligible?
Both accounts use the same IRS list of qualified medical expenses: deductibles, copays, prescriptions, dental work, vision care, glasses and contacts, mental health care, and many over-the-counter medicines. Neither covers cosmetic procedures or general health-club dues. IRS Publication 502 is the authoritative list.
Do I lose my HSA if I change jobs?
No. Your HSA is yours — it is not tied to your employer, so it follows you when you change jobs, retire, or get laid off. An FSA is the opposite: it generally stays with the employer, and you usually lose access to unspent funds when you leave (COBRA continuation is possible but rare in practice).
Is an HSA or FSA better if I am young and healthy with low medical bills?
Usually the HSA. If your medical bills are near zero, an FSA forces you to guess low and risks forfeiting whatever you do not spend, while an HSA lets you contribute the maximum, invest it, and let it compound for decades. The one exception is if you have no HDHP option — then an FSA beats paying medical bills with fully taxed dollars.
Can I use an HSA or FSA for dental and vision?
Yes. Both HSAs and general-purpose FSAs cover dental expenses (cleanings, fillings, orthodontia) and vision expenses (eye exams, glasses, contacts, LASIK). This is also why a limited-purpose FSA — dental and vision only — is allowed alongside an HSA: it does not disqualify you.
Should I max out my HSA before contributing to an FSA?
For most HSA-eligible people, yes: max the HSA first because of the rollover, the investment growth, and portability. A common winning strategy is maxing the HSA plus a limited-purpose FSA for planned dental or vision costs, since the limited-purpose FSA does not kill HSA eligibility. Contributing to a general-purpose FSA before maxing the HSA usually wastes the HSA's compounding years.
What is the difference between an HSA, an FSA, and a PPO?
A PPO is a type of health insurance plan, while an HSA and an FSA are tax-advantaged accounts that pay for medical costs. They pair differently: an HSA requires a high-deductible health plan (HDHP), not a PPO, while a general-purpose FSA can pair with a PPO or most other plans. So the real open-enrollment choice is usually HDHP-plus-HSA versus PPO-plus-FSA — which is exactly what the 5-year calculator above compares.
Can I have an HSA and a dependent care FSA at the same time?
Yes. A dependent care FSA pays for childcare or elder-care costs so you can work — it is not medical coverage, so it does not disqualify you from HSA contributions. Only a general-purpose health FSA blocks HSA eligibility; a limited-purpose health FSA (dental and vision only) is also allowed alongside an HSA.