Saving for Healthcare
Tax-advantaged accounts that allow you to save specifically for medical costs
Which account is right for you?
Health Savings Account
(HSA)
Flexible Spending Account
(FSA)
Health Reimbursement Account (HRA)
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Control
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Owned by the employee
Owned by the employer
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Control
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Control
Owned by the employer
Employer & employee funded
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Funding
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Funding
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Funding
Employer & employee funded
100% employer funded
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Contribution Limits
$4,400 single, $8,750 family (2026)
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Contribution Limits
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Contribution Limits
Medical FSAs: $3,400 (2026)
Dependent Care FSAs: $7,500 (2026) if not filing married separately.
Determined by the employer
Must be enrolled in a High-Deductible Health Plan
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Health Plan Eligibility
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Health Plan Eligibility
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Health Plan Eligibility
Must be offered a group health plan by employer
Can be built to work with any health plan
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Fund Availability
As they're contributed
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Fund Availability
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Fund Availability
Medical FSAs: On first day of plan year
Dependent Care FSAs: As they're contributed
X
Contributions are pretax or tax-deductible. Growth & qualified distributions are tax-free.
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Tax Savings
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Tax Savings
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Tax Savings
Contributions are pre-tax & qualified distributions are tax-free
X
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Rollover
Unused balances rollover into the next year
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Rollover
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Rollover
You forfeit any unused balance unless your employer allows a rollover ($500 cap)
Yes, if allowed by employer plan
Yes
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Investment Capability
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Investment Capability
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Investment Capability
No
No
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Portability
Yes, HSA stays with the account holder
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Portability
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Portability
No
No
IRS-approved medical/dental/vision expenses for participant and qualified dependents
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Covered Expenses
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Covered Expenses
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Covered Expenses
IRS-approved medical/dental/vision expenses or qualified dependent care expenses.
Employer-approved expenses for employee and qualified dependents
Health Savings Account (HSA)
A Health Savings Account is a type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses.
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Triple Tax Benefits
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Contribute pre-tax money​
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Enjoy tax-free growth
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Withdrawals for qualified uses are tax-free
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The "Health IRA"
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It can be used to help boost retirement savings
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Contributions can often be invested into funds
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No Required Minimum Distributions (RMDs)​
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Flexible
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Uses include: copays, deductibles, etc.​
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Unused funds rollover to the next year
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You own it so it's portable
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Flexible Spending Account (FSA)
Flexible spending accounts come only as part of a benefits package from an employer — you can’t get one on your own — but the medical expenses you can use them for are the same as HSAs.
It is an arrangement through your employer that lets you pay for many out-of-pocket medical expenses with tax-free dollars.
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What's the advantage to the employee?
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Contributions are pre-tax
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Can make incremental contributions, but can still use the full annual amount right away
What's the advantage for employers?
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Can choose to contribute or not
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Can choose to allow some unused money to rollover
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Health Reimbursement Account (HRA)
Health Reimbursement Accounts (HRAs) are employer-funded group health plans from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year.
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The employer funds and owns the arrangement.
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What's the advantage to the employee?
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Employer contributions are not part of wages, so they are tax-free
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Unused money may rollover, employer decides how much
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What's the advantage for employers?
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Contributions are tax deductible
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Can choose which qualified medical expenses money can be used for
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Can choose if money rolls over at the end of the year
