HSAs vs. FSAs

Health Savings Accounts (HSAs) share some similarities with Flexible Spending Accounts (FSAs) and other medical spending accounts, but there are important differences.

  HSAs  FSAs 
Ownership/ Control   Owned and controlled by you as the individual account holder  Controlled by your employer 
Portability Portable so the money goes with you even if you leave your employer or insurance plan  Not portable so you lose any money in the account if you leave your employer 
Interest Able to earn interest  Do not earn interest 
Savings/ Retirement Allow you to keep the money in your account from year to year, and add retirement and estate planning benefits  You must spend the money you contribute each year; any money left in the account at year-end is forfeited  
Spending You cannot spend more than you have in the account at the time of the purchase  You can spend more than you have in your account as long as your payroll deductions will make it up by the end of the year   
Claims/ Approvals You are responsible to the IRS for spending only on Qualified Medical Expenses  and must provide receipts, if audited  You file a reimbursement request and your employer approves if your spending meets IRS requirements 
Tax Reporting You are responsible for identifying qualified medical expenses for IRS tax reporting  Your employer is responsible for following IRS guidelines for FSA reimbursements