FSA vs HSA: same eligible items, opposite deadlines
The two accounts share a shelf — every item in our eligibility checker works for both — but they behave like opposites everywhere else. One is a yearly budget with a burn-down deadline; the other is a permanent, investable account. Here's the side-by-side, and the strategy that falls out of it.
The side-by-side
| FSA (health) | HSA | |
|---|---|---|
| Who owns it | Your employer's plan | You — it follows you between jobs |
| Deadline | Expires at plan year-end (use it or lose it) | Never expires |
| Eligibility to open | Employer must offer it; no insurance requirement | Requires an HSA-qualified high-deductible health plan (HDHP) |
| 2026 contribution limit | $3,400 (employee salary reduction) | Set annually by the IRS for self-only vs family HDHP coverage (+$1,000 catch-up at 55) |
| Funds available | Full election available on day one of the plan year | Only what's actually been deposited |
| Investing | No | Yes — balances can be invested and compound tax-free |
| Eligible items | IRS Publication 502 list | The same list — identical eligibility rules |
HSA contribution limits change yearly and depend on your HDHP coverage tier — check the current IRS figures before electing.
The deadline is the whole personality difference
An FSA is a budget: you commit an amount in open enrollment, get it all up front, and must burn it down before the plan year ends (the deadline rules decide exactly when). An HSA is savings: whatever you don't spend keeps compounding, tax-free, for decades. That single difference drives every strategy below.
Strategy: which to fund, which to spend
If your employer offers only an FSA: elect conservatively — an amount you know you'll spend on glasses, dental, prescriptions, and the OTC restock. The tax saving is real, but only on dollars you actually use.
If you're on an HDHP with an HSA: fund it as far as you can. It's the only triple-tax-advantaged account in the US system, and unspent money is a feature, not a deadline problem.
If you have both (HSA + limited-purpose dental/vision FSA): spend the FSA first, always. It expires; the HSA doesn't.
The mistake that costs the most
Treating an HSA like an FSA — racing to spend it by December. There is no HSA deadline. If you're sitting on an HSA balance in late December wondering what to buy, the best answer is usually: nothing. Invest it and let it ride.
FAQ
Does HSA money expire?
No. An HSA is your account, like an IRA — the balance rolls over indefinitely, moves with you between jobs, and can be invested. The use-it-or-lose-it deadline is an FSA problem only.
Can I have both an FSA and an HSA?
Generally not at the same time, because a general-purpose FSA disqualifies you from HSA contributions. The exception is a limited-purpose FSA (dental + vision only), which some employers offer specifically so HSA savers can also run dental and vision spending through pre-tax dollars.
Are the eligible items different between FSA and HSA?
No — both follow the same qualified-medical-expense rules (IRS Publication 502 / Section 213(d)). Every answer in our eligibility checker applies to both account types. The difference is when you must spend, not what you can buy.
If I have both (HSA + limited-purpose FSA), which do I spend first?
Spend the FSA first, always — it expires; the HSA doesn't. More broadly, optimizers pay cash for medical costs they can afford and let the HSA compound invested, since it's the only account that's tax-free going in, growing, and coming out (for qualified expenses).
Last reviewed 2026-06-09. Based on IRS Publication 502 and published IRS guidance. Not tax, legal, or medical advice — your plan administrator has the final say.