HSA vs FSA: What’s the Difference and Which One is Right for You?
- Jing-Jing Cardona
- Apr 28
- 3 min read
When it comes to saving money on healthcare expenses, two popular options often come up: the Health Savings Account (HSA) and the Flexible Spending Account (FSA). While both help you set aside pre-tax dollars for medical costs, they work differently — and understanding those differences can help you choose the right tool for your financial and healthcare goals.
What is an HSA (Health Savings Account)?
A Health Savings Account (HSA) is a special savings account for people enrolled in a high-deductible health plan (HDHP). It allows you to contribute pre-tax income to cover qualified medical expenses such as doctor visits, prescriptions, and more.
Key features of an HSA:
Ownership: The account belongs to you, not your employer.
Portability: You keep your HSA even if you switch jobs or insurance plans.
Rollover: Unused funds roll over year after year.
Triple Tax Advantage: Contributions are tax-deductible, growth is tax-free, and withdrawals for eligible expenses are tax-free.
Investment Opportunities: Many HSA providers allow you to invest your balance like a 401(k) once you reach a certain amount.
Who can open an HSA?
You must be covered by a qualifying HDHP.
You cannot be enrolled in Medicare.
You cannot be claimed as a dependent on someone else’s tax return.
What is an FSA (Flexible Spending Account)?
A Flexible Spending Account (FSA) is typically offered by employers and allows employees to set aside pre-tax money for eligible healthcare expenses.
Key features of an FSA:
Employer-Owned: The account belongs to your employer. You may lose unused funds if you change jobs.
Use-It-or-Lose-It: Most FSAs require you to use the funds within the plan year. Some employers offer a small rollover (up to $640 for 2024) or a short grace period.
No HDHP Requirement: You don’t need a specific type of health insurance plan to participate in an FSA.
Can I Use an HSA or FSA for Direct Primary Care Memberships?
If you're thinking about joining a Direct Primary Care (DPC) practice, you might wonder if you can use your HSA or FSA funds to pay for the membership fees. The answer isn't straightforward: The eligibility of DPC membership fees for HSA or FSA reimbursement depends on specific tax rules and how the membership is structured. It’s highly advisable to speak with a tax specialist or benefits administrator to confirm whether your HSA or FSA can be applied to DPC fees. Even if the membership fee itself is not eligible, you can still use HSA or FSA dollars for qualified medical expenses ordered by your DPC provider — such as lab work, imaging, prescriptions, or referrals to specialists. Pairing a Direct Primary Care membership with an HSA, in particular, can be a strategic way to manage your healthcare costs while receiving more personalized, accessible care.
Final Thoughts on Choosing Between an HSA and FSA
Both HSAs and FSAs offer excellent opportunities to save on healthcare costs, but they serve different needs. An HSA offers more flexibility, long-term savings potential, and investment opportunities — but it requires you to have a high-deductible health plan. An FSA offers tax savings for those who don't have an HDHP but comes with stricter rules about fund usage and portability. When open enrollment comes around, consider your health needs and financial goals carefully. Planning ahead can help you maximize your benefits, especially if you're considering innovative care models like Direct Primary Care that may change the way you think about paying for healthcare.
About Cardona Direct Primary Care & RefineMD Aesthetics
At Cardona Direct Primary Care, Dr. Cardona and Dr. Garland provide personalized healthcare, including direct primary care, obesity medicine, and aesthetic treatments. Dr. Cardona is board-certified in both family medicine and obesity medicine and has a special interest in medical weight loss. Dr. Garland is board-certified in family medicine and is a certified medical marijuana provider. She has a special interest in skincare and is eager to assist with your individual skincare needs. Located in Jacksonville, FL, we are dedicated to prioritizing you. Contact us at 904-551-4625 or visit our website at www.cardonadpc.com to learn more and schedule your appointment today!
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