Making Sense of Medical Savings Accounts
HSAs v. FSAs
Written by: Andrew Hall.
Medical savings accounts offer a tax-free way to save money for qualified medical expenses while also lowering your taxable income, giving you a little bit of help from Tax Day. Although both types of medical savings account help you set aside money to offset your healthcare costs, there are a few key differences between the two to consider before choosing which one.
HSA: You must enroll in a qualified High Deductible Health Plan (HDHP) to be eligible for an HSA.
Compared to FSA: To be eligible for an FSA, you must be an employee eligible for benefits through an employer that offers FSA benefits.
Maximum Annual Contribution
HSA: $3,550 for an individual and $7,100 for a family. 
Compared to FSA: $2,750 individual contribution.
What Happens to Unused Funds?
HSA: You keep unused funds regardless of plan enrollment or employment. It is a bank account with your name on it.
Compared to FSA: Some employers allow employees to roll over up to $500 of unused funds to your next plan year. If your employer does not allow this, all unused funds are forfeited.
How Can I Use This Money?
HSA: You can use HSA funds on qualified medical expenses. Additionally, after age 65, HSA funds can be used as a traditional retirement account.
Compared to FSA: You can use FSA funds on qualified medical expenses.
Does the Account Earn Interest?
HSA: Yes. An HSA account gains interest as long as you have the account.
Compared to FSA: No. FSA accounts do not earn interest and “resets” at the start of each benefit year.
How Do I Access the Money in My Account?
It’s common for both HSA and FSA accounts to provide debit cards to access the funds quickly.