Both the Health Savings Account and the Flexible Spending Account let you pay for qualified medical expenses with pre-tax dollars. That's where the similarity ends. The HSA is an individually owned account that requires a high-deductible health plan, invests like a 401(k), and follows you between jobs forever. The FSA is an employer-owned account tied to your current job, usually has a use-it-or-lose-it rule, and disappears if you leave. The 2026 limits — $4,400/$8,750 for HSAs, $3,400 for health FSAs, and a newly raised $7,500 for Dependent Care FSAs — set the ceiling. The eligibility rules decide which one (or both) you can use. Project your HSA savings over 20 years Our HSA calculator models the triple-tax-advantaged growth using your contribution rate, investment return, and marginal tax bracket. Open HSA Calculator → 2026 — Limits Side-by-Side Account2026 — LimitCarryoverIRS Source HSA — self-only HDHP$4,400 — Unlimited (rolls every year)Rev. Proc. 2025-19 HSA — family HDHP$8,750 — UnlimitedRev. Proc. 2025-19 HSA — catch-up (age 55+)+$1,000 — UnlimitedIRC §223(b)(3) Health FSA$3,400$680 max (if plan allows)Rev. Proc. 2025-32 — Dependent Care FSA$7,500 — None (use it or lose it)IRC §129 (statutory increase) Commuter (parking) — $340/moMonthlyRev. Proc. 2025-32 — Commuter (transit) — $340/moMonthlyRev. Proc. 2025-32 — The Dependent Care FSA limit was raised from $5,000 (where it had been frozen since 1986) by Congress for plan years beginning in 2026. How Each Account Works HSA You own it personally — moves with you between jobs
Requires HDHP coverage ($1,650+ self / $3,300+ family deductible in 2026)
Triple tax advantage: pre-tax in, tax-free growth, tax-free qualified withdrawals
Can invest the balance like a brokerage account
Funds roll over forever — no expiration
After age 65, non-medical withdrawals are taxed at ordinary rates (no penalty)
Employer-owned — does not follow you to a new job
Works with any health plan (no HDHP requirement)
Two tax advantages: pre-tax in, tax-free qualified withdrawals
Full annual election is available January 1 (the "uniform coverage rule")
Use-it-or-lose-it: max $680 carryover into 2027 if employer allows
Forfeited at separation (unless COBRA elected)
The Eligibility Trap
You cannot contribute to an HSA if you (or your spouse, via your spouse's general-purpose FSA) are covered by any health benefit other than a qualifying HDHP. The full list of disqualifying coverage includes:
A general-purpose health FSA (yours or a spouse's)
An HRA that pays first-dollar medical costs
Enrollment in Medicare (any part — A, B, C, or D)
TRICARE coverage
VA medical benefits received in the previous three months (with limited exceptions)
Being claimed as a dependent on someone else's tax return
Two compatible combinations:
HSA + Limited-Purpose FSA — a Limited-Purpose FSA covers only dental and vision, so it does not disqualify the HSA. Good for people who want pre-tax dollars for braces or LASIK.
HSA + Dependent Care FSA — DCFSA covers childcare, not medical, so it's always compatible with an HSA.
When HSA Wins, When FSA Wins
The HSA "Receipt Stacking" Strategy
An HSA has no time limit on reimbursing yourself for past medical expenses, as long as the expense was incurred after the HSA was opened and you have the receipt. The mechanic that follows from this rule:
Contribute the family max ($8,750 in 2026) every year.
Pay out-of-pocket for current medical expenses using regular cash.
Keep digital scans of every medical receipt — copay receipts, dental, vision, prescriptions.
Invest the HSA balance in index funds and let it grow for decades.
In retirement, reimburse yourself for all those old receipts in a single year, tax-free.
A 35-year-old contributing the family max for 30 years at a 7% return ends up with roughly $830,000 in the HSA. With $30,000 of saved receipts, they can pull $30,000 out tax-free immediately — and the rest acts like a Traditional IRA after age 65.
Model your HSA's 30-year value at different contribution rates:
Frequently Asked Questions
What is the HSA contribution limit for 2026?
The 2026 HSA contribution limit is $4,400 for self-only HDHP coverage and $8,750 for family HDHP coverage, per IRS Revenue Procedure 2025-19. Account holders age 55 and older may contribute an additional $1,000 catch-up. Spouses age 55+ each need their own HSA to use their catch-up.
What is the FSA contribution limit for 2026?
The 2026 health FSA salary-reduction limit is $3,400, per IRS Revenue Procedure 2025-32. The indexed FSA carryover into 2027 is $680. The Dependent Care FSA limit jumps to $7,500 for 2026, the first increase since 1986 — it had been stuck at $5,000.
Can I have both an HSA and FSA?
Not at the same time with a standard health FSA — having any general-purpose FSA (yours or a spouse's) disqualifies you from HSA contributions. The only compatible pairing is a Limited-Purpose FSA (dental and vision only) plus an HSA. Dependent Care FSAs are always compatible with an HSA.
What is the triple tax advantage of an HSA?
Contributions are pre-tax (or above-the-line deductible), investment growth inside the HSA is tax-free, and qualified medical withdrawals at any age are tax-free. No other account combines all three. After age 65, withdrawals for non-medical purposes are taxed as ordinary income — like a Traditional IRA — with no penalty.
Do FSA funds roll over to next year?
Only partly. Employers may allow up to $680 of unused 2026 health FSA funds to carry into the 2027 plan year (the indexed cap). The rest is forfeited under the use-it-or-lose-it rule. Some employers offer a 2.5-month grace period instead of carryover — you cannot have both.
What is the 2026 HDHP minimum deductible?
For 2026, an HSA-qualifying high-deductible health plan must have a minimum deductible of $1,650 for self-only coverage or $3,300 for family coverage. Annual out-of-pocket maximums cannot exceed $8,500 self / $17,000 family, per IRS Rev. Proc. 2025-19.
Sources & Further Reading
IRS Revenue Procedure 2025-19 — 2026 HSA contribution and HDHP cost-sharing limits (PDF).
IRS Revenue Procedure 2025-32 — 2026 FSA and commuter benefit limits (PDF).
IRS Publication 969 — HSAs and Other Tax-Favored Health Plans.
Healthcare.gov — Flexible Spending Account (FSA).
For informational purposes only. Not tax or financial advice. Employer plan rules can be stricter than the IRS limits — confirm your specific plan documents before enrolling.
Originally published (with a free interactive calculator) at https://mortgagecalculatortools.com/hsa-vs-fsa-2026.html. Figures current as of August 2026; sources listed on the original page. Not legal or financial advice.
