HSA vs FSA: the key differences
| HSA (Health Savings Account) | Health FSA (Flexible Spending Account) | |
|---|---|---|
| Who can have one | Only people on an HSA-eligible high-deductible health plan | Employees whose employer offers it; any health plan |
| 2027 contribution limit | $4,500 self-only, $9,000 family, +$1,000 if 55+ | $3,400 in 2026; 2027 limit announced in the fall |
| Leftover money | Rolls over every year, no limit | Lost, except a limited carryover ($680 from 2026 into 2027) or a grace period, if your plan offers one |
| Change jobs | The account is yours and goes with you | Usually forfeited |
| Invest the money | Yes | No |
| Money available | As it's deposited | Full annual amount on day one |
| Change your amount mid-year | Any time | Only with a qualifying life event |
You generally can't have both a regular health FSA and an HSA at the same time. A limited-purpose FSA for dental and vision is the exception many employers offer alongside an HSA.
How the calculator decides
For each plan it adds your premiums and your share of the medical bills (deductible first, then coinsurance up to the out-of-pocket maximum). Then it subtracts what you save in federal, state and payroll taxes on your contributions, plus the employer's HSA contribution. Money you deposit yourself isn't a cost, because unspent HSA dollars stay yours. FSA money you can't use or carry over is counted against you.
The chart repeats the calculation for spending from $0 to well past both out-of-pocket maximums, so you can see how each plan holds up in a healthy year and in a bad one.
Example
You're single, in the 22% bracket with 5% state tax, and expect about $2,500 of medical costs. Plan A has a $1,200 premium, a $3,000 deductible and a $750 employer HSA contribution; you add $3,750. Plan B has a $2,800 premium and a $1,000 deductible, and you put $1,500 in an FSA.
Plan A: $1,200 premium + $2,500 in bills − $1,299 tax saved − $750 from your employer = $1,651, and $2,000 is still in your HSA at year end. Plan B: $2,800 + $1,300 − $520 tax saved = $3,580, with $200 of FSA money carried over. The HSA plan comes out about $1,930 ahead.
Who usually comes out ahead
- HSA plans tend to win for people with low to moderate medical costs, a meaningful employer HSA contribution, and enough savings to cover the deductible if something happens.
- Traditional plans tend to win for people who expect high, predictable costs every year, like ongoing treatment or a planned surgery, especially when the traditional plan has a much lower out-of-pocket maximum.
- The HSA is also a retirement account. After 65 you can withdraw for any reason and pay only ordinary income tax, like a traditional IRA. Medical withdrawals stay tax-free at any age.
- State taxes: California and New Jersey tax HSA contributions at the state level. If you live there, set state tax to 0% for Plan A's savings, or treat the result as slightly optimistic.
Frequently asked questions
What is the HSA contribution limit for 2027?
$4,500 for self-only coverage and $9,000 for family coverage, plus a $1,000 catch-up contribution if you're 55 or older. Employer contributions count toward the limit.
What is the FSA limit for 2027?
The IRS usually announces the next year's health FSA limit in October or November. For 2026 it is $3,400, with up to $680 allowed to carry over into 2027 if your plan offers carryover.
Can I have an HSA and an FSA at the same time?
Generally not a regular health FSA. Many employers offer a limited-purpose FSA for dental and vision expenses that you can use alongside an HSA.
Is an HSA better than an FSA?
An HSA is usually more flexible: the money rolls over, goes with you if you change jobs, and can be invested. But it requires a high-deductible plan, which can cost more in a year with big medical bills. Compare the total cost of both plans for your situation.
What happens to unused FSA money?
It's forfeited at the end of the plan year, unless your plan allows a carryover (up to $680 from 2026 into 2027) or a grace period of up to 2.5 months.
Estimates only. Real plans have copays, separate prescription tiers, and network rules that this model doesn't include. 2027 HSA and HDHP limits from IRS Rev. Proc. 2026-24. Health FSA limits from the IRS 2026 inflation adjustments. Not financial, tax or medical advice. Last updated September 29, 2026.