Save Thousands with Health Spending Accounts

Compare HSA, FSA, MSA, and HRA to find the best tax-advantaged account for your healthcare needs

Health Spending Accounts Comparison

$7,750

Max HSA family contribution (2024)

Source: IRS

30%

Average tax savings on contributions

Source: Employee Benefit Research Institute

$3,050

Max FSA contribution (2024)

Source: IRS

Compare Health Spending Accounts

FeatureHSAFSAMSAHRA
2024 Contribution Limit$3,850 (individual)
$7,750 (family)		$3,050Up to 75% of deductibleNo limit (employer decides)
Who Can ContributeYou and employerYou and employerYou or employerEmployer only
Eligibility RequirementsHigh-deductible health planOffered by employerSelf-employed or small businessOffered by employer
Funds Roll OverYes, indefinitelyLimited ($610 in 2024)YesEmployer decides
Tax BenefitsTriple tax advantagePre-tax contributionsTax-deductible contributionsTax-free reimbursements
Investment OptionsYesNoYesNo
PortabilityYesNoYesNo

Health Savings Account (HSA)

The most flexible and tax-advantaged option, offering triple tax benefits: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified expenses.

Best for: Ideal for healthy individuals with high-deductible health plans who want to save for future medical expenses.

Key Features:

  • Never expires - funds roll over year to year
  • Can be invested like a retirement account
  • Portable - keeps working if you change jobs
  • Can be used as retirement account after 65

Smart Tips:

  • Contribute the maximum if possible
  • Save receipts indefinitely for future reimbursement
  • Consider investing funds not needed short-term
  • Use for retirement planning

Flexible Spending Account (FSA)

A use-it-or-lose-it account that lets you set aside pre-tax dollars for healthcare expenses within the current year.

Best for: Good for people who can accurately predict their yearly medical expenses and want to reduce their taxable income.

Key Features:

  • Lower contribution limits than HSA
  • Must use funds within plan year
  • Can carry over limited amount ($610 in 2024)
  • Immediate access to full year's funds

Smart Tips:

  • Plan expenses carefully to avoid losing money
  • Use grace period or carryover if available
  • Stock up on eligible items at year-end
  • Consider life changes when choosing amount

Medical Savings Account (MSA)

A rare type of account for self-employed individuals or small business employees with high-deductible health plans.

Best for: Self-employed individuals and employees of small businesses with high-deductible health plans.

Key Features:

  • Similar to HSA but with different limits
  • Can be used with Medicare
  • Funds roll over year to year
  • Can be invested for growth

Smart Tips:

  • Compare with HSA if you have both options
  • Consider Medicare implications
  • Track qualified medical expenses
  • Save receipts for tax purposes

Health Reimbursement Arrangement (HRA)

An employer-funded account that reimburses you for qualified medical expenses.

Best for: Employees who want additional coverage without contributing their own money.

Key Features:

  • Employer funds 100% of benefit
  • No contribution limits
  • Tax-free reimbursements
  • Flexible plan designs

Smart Tips:

  • Understand your plan's specific rules
  • Submit claims promptly
  • Keep detailed records
  • Check rollover policies

Common Mistakes to Avoid

Not Contributing Enough

Many people don't maximize their tax savings by contributing less than the annual limit.

Solution: Set up automatic contributions to reach the maximum allowed amount if your budget permits.

Letting FSA Funds Expire

FSA funds typically expire at year-end, with only $610 allowed to roll over in 2024.

Solution: Plan your healthcare expenses and use FSA funds before they expire.

Missing HSA Investment Opportunities

Keeping all HSA funds in cash instead of investing for long-term growth.

Solution: Consider investing HSA funds above your deductible amount for potential long-term growth.

Not Keeping Receipts

Failing to save documentation for tax purposes or future reimbursements.

Solution: Save all receipts digitally or physically for tax records and future withdrawals.

Research-Backed Strategies

HSA as Retirement Strategy

After age 65, HSA funds can be withdrawn for non-medical expenses by paying regular income tax, similar to a traditional IRA. This makes HSAs a powerful tool for retirement planning.

Triple tax advantage: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified expenses

Source: IRS Publication 969

Long-term HSA Growth

Consider paying current medical expenses out-of-pocket while investing HSA funds for long-term growth. You can reimburse yourself for documented medical expenses at any time in the future.

A family contributing the maximum HSA amount for 20 years could accumulate over $300,000 assuming average market returns

Source: Employee Benefit Research Institute, 2023

FSA Strategic Planning

FSA funds are available in full at the start of the plan year, while contributions are deducted throughout the year. Consider scheduling larger medical expenses early in the plan year.

Average FSA participant saves $500 annually in taxes based on 30% tax bracket

Source: Society for Human Resource Management

Frequently Asked Questions

What's the difference between an HSA and FSA?

HSAs are only for high-deductible health plans, never expire, and have higher contribution limits ($7,750 family in 2024). FSAs work with any health plan, but funds mostly expire yearly and have lower limits ($3,050 in 2024).

Can I have both an HSA and FSA?

Generally, you cannot have both an HSA and a regular FSA. However, you can have an HSA with a limited-purpose FSA that only covers dental and vision expenses.

What happens to my FSA if I leave my job?

FSA funds typically must be used before leaving your job, unless you qualify for COBRA. Any remaining funds usually are forfeited to your employer.

Can I invest my HSA funds?

Yes, most HSA providers allow you to invest funds above a certain balance (usually $1,000-2,000) in mutual funds or other investments, similar to a retirement account.

Calculate Your Savings

Use our calculator to estimate your tax savings with health spending accounts

Calculate SavingsCompare Plans