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HSA funds never expire: key differences from FSAs explained
Executive overview
Health Savings Accounts (HSAs) roll over indefinitely — unlike FSAs, the money never expires. HSAs require enrollment in a high-deductible health plan; FSAs do not. Annual IRS contribution limits apply, but unused balances carry forward every year.
HSA funds carry over permanently and can even be invested for long-term growth.
HSA basics
- Personal bank account with triple tax advantages
- Must be paired with a High Deductible Health Plan (HDHP)
- Used to pay qualified medical expenses not covered by insurance
- Competitive benefit that aids recruitment and retention
HSA vs FSA: key differences
- HSA funds roll over each year automatically; FSA funds do not
- FSA funds must be spent by end of plan year (grace period may apply)
- FSAs allow pre-tax contributions for health or dependent care expenses
- FSAs do not require HDHP enrollment
2023 HSA contribution limits
- Self-only coverage: $3,850
- Family coverage: $7,750
- Catch-up contribution (age 55+): $1,000
Key HSA benefits
- Triple tax savings on deposited funds
- Automatic annual rollover — no use-it-or-lose-it pressure
- Funds usable indefinitely for qualified medical expenses
- Option to invest HSA funds for long-term growth
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