The Consumers Congress

HSA and FSA Accounts Are Very Different – Here’s Why

No two things are the same. Even identical twins have differences. This same can be said for health savings account (HSA) and flexible spending accounts (FSA). It is easy to get confused with these two. However, if you want to want to end up with an account that suits your needs, you will have to dig deeper into the areas where HSA differs from FSA. Get more information about HSA vs FSA accounts to erase your confusion.

HSA and FSA accounts: Similarities

  • Both are tax-advantaged accounts
  • Both allow employees to save money which can be used to pay for out-of-pocket expenses or qualified medical expenses.
  • Contributions are tax-free.

HSA vs FSA: Differences


  • Either the employee or the individual can establish this account.
  • Can only be established in connection or conjunction with HSA-qualified high deductible health plan (HDHP).
  • The employee can only make the contributions as long as he or she is still covered by the HDHP. However, the employee may still use the money, in the future, even when he or she no longer has HDHP coverage.
  • The 2019 contribution limit is for single/ without dependents employees is set at $3,500.
  • For employees with families, the 2019 contribution limit will be at $7,000.
  • In the instance that the HSA was established by the employer and the employee either resigns or gets terminated, the employee will take the HSA. It doesn’t matter who made the contribution. HSA is owned by the employee.
  • Any unused amount stays in the account.


  • Only the employer can establish this account.
  • Pre-tax payroll deduction is the main source of funding. However, the employer also has an option to contribute.
  • Health insurance coverage is not required, but FSAs can be used together with any type of health insurance.
  • Any amount that is not used within the year is forfeited. However, the employer may give an employee a grace period of 2.5 months to use the money or rollover about $500 for the next year.
  • The FSA 2019 contribution limit is set at $2,700.

Always choose the plan that will suit your needs. Choose the plan you think will give you more benefits. Read more about HSA and FSA and ask questions before making your choice.