Does FSA or HSA Roll Over? Understanding the Differences

When it comes to health savings accounts, many people wonder whether their funds roll over from year to year. So, do FSA or HSA roll over? Let's delve into the details to understand the differences between the two.

Flexible Spending Accounts (FSAs) have a 'use it or lose it' policy, meaning that any unused funds at the end of the plan year are forfeited. However, some employers offer a grace period or allow a limited amount of funds to roll over to the following year.

Health Savings Accounts (HSAs), on the other hand, are designed to be more flexible and long-term. The funds in an HSA roll over from year to year, allowing account holders to build savings for future healthcare expenses. Additionally, HSAs are portable, meaning you can take your account with you even if you change jobs.

Here's a quick overview of the key differences between FSA and HSA rollover:

• FSAs typically have a 'use it or lose it' policy
• HSAs allow funds to roll over from year to year
• Some employers may offer grace periods or rollover options for FSAs
• HSAs are portable and can be retained even if you change jobs

Health Savings Accounts (HSAs) provide a much greater advantage over Flexible Spending Accounts (FSAs) when it comes to rolling over funds. With HSAs, not only do the funds roll over from year to year, but they also grow tax-free, making them a great tool for managing future healthcare costs.