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Answer

HSA, FSA, and HRA: what is the difference?

The short answer

All three help pay medical costs with money that is not taxed by the federal government. An HSA is yours to keep and needs a qualifying high-deductible plan. A healthcare FSA comes through work, and unused money may be lost. An HRA is funded only by your employer.

Key takeaways

  • HSA money stays yours, even if you change jobs or plans.
  • Healthcare FSA money is mostly "use it or lose it," though some plans allow a small carryover or extra time.
  • A dependent-care FSA is for child or adult day care, not medical bills.

What you can do next

  1. Check which account types your employer or plan offers.
  2. Confirm whether your plan is HSA-qualified before opening or adding to an HSA.
  3. Use the FSA or HSA planner to think through an amount.

Read the full lesson

Words in this lesson

HSA (health savings account)
A savings account you own for medical costs, available with an HSA-qualified high-deductible plan. Money rolls over each year.
Healthcare FSA (flexible spending account)
A work account where you set aside pay before federal tax for medical costs. Unused money is generally lost unless your plan offers a carryover or grace period.
Limited-purpose FSA
An FSA that pays mainly for dental and vision costs. It can be used alongside an HSA.
HRA (health reimbursement arrangement)
An account funded only by your employer to pay certain medical costs. The employer sets its rules.
Dependent-care FSA
A work account for child care or adult day care costs so you can work. It does not pay medical bills.
High-deductible health plan (HDHP)
A health plan that meets federal deductible and out-of-pocket rules, which lets you contribute to an HSA if you meet other requirements.

Related

This is general education. For decisions about your own plan, taxes, or legal rights, check your plan documents or a qualified professional.

Sources

  1. Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans Internal Revenue Service. Applies to: 2025 tax year edition (rules described still used for 2026 where unchanged; 2026 edition not yet checked). Published or updated: Unknown. Retrieved: November 6, 2026.
  2. Rev. Proc. 2025-19 (2026 HSA, HDHP and excepted-benefit HRA amounts) Internal Revenue Service. Applies to: 2026. Published or updated: Unknown. Retrieved: October 14, 2026.
  3. Rev. Proc. 2026-24 (2027 HSA, HDHP, excepted-benefit HRA and DPCSA amounts) Internal Revenue Service. Applies to: 2027. Published or updated: Unknown. Retrieved: October 14, 2026.
  4. Message Board: 2026 FSA contribution limits FSAFEDS (U.S. Office of Personnel Management program). Applies to: 2026. Published or updated: Unknown. Retrieved: October 14, 2026.
  5. Notice 2026-5: HSA changes under Public Law 119-21 Internal Revenue Service. Applies to: 2026. Published or updated: Unknown. Retrieved: November 6, 2026.
  6. California treatment of health savings accounts California Franchise Tax Board. Applies to: unknown. Published or updated: Unknown. Retrieved: .