FSAFeds and HSAs are different accounts with different rules
FSAFeds is a Flexible Spending Account (FSA), not a Health Savings Account (HSA). The two are often confused because both let you set aside pre-tax money for medical costs, but they work differently and have different limits, rollover rules, and may be able to access requirements.
FSAFeds is the FSA program for federal employees, retirees, and their families. It is run by the Office of Personnel Management (OPM) and administered through the Federal Employees Health Benefits (FEHB) program. You can only enroll during the Federal Employees Health Benefits open season, which typically runs in November and December each year.
An HSA, by contrast, is available to anyone with a high-deductible health plan (HDHP) from any employer or marketplace. You can open one at any time of year through a bank or financial institution. The two accounts serve similar purposes but operate under completely separate rules.
Key Takeaways
- FSAFeds is an FSA for federal employees only; HSAs are available to anyone with a may have access to high-deductible health plan.
- FSAFeds money must be spent or forfeited by the end of the plan year (with a limited carryover option); HSA money rolls over indefinitely and grows like a retirement account.
- FSAFeds has an annual contribution limit of $3,300 for self-only coverage and $6,550 for family coverage as of 2024, while HSA limits are higher and indexed to inflation each year.
- You can enroll in FSAFeds only during the federal open season; you can open an HSA at any time if you have an HDHP.
- FSAFeds covers may be able to access medical, dental, and vision expenses; HSAs cover medical expenses only, not routine dental or vision care.
How FSAFeds differs from an HSA in spending and carryover
The biggest practical difference is what happens to money you do not spend. With FSAFeds, you must use the funds within the plan year or lose them—this is called the use-it-or-lose-it rule. As of 2024, you can carry over up to $640 to the next year, but anything beyond that is forfeited. This means you have to estimate carefully how much medical spending you will have.
An HSA has no use-it-or-lose-it rule. Money you do not spend stays in the account forever and can grow through investment. Many people treat HSAs like retirement accounts, letting the balance accumulate year after year. This makes HSAs much more flexible for long-term health planning.
FSAFeds also covers dental and vision expenses in addition to medical costs. An HSA covers only medical expenses—routine dental cleanings, eyeglasses, and contact lenses are not may be able to access unless they are medically necessary treatments for a specific condition.
Contribution limits and who can enroll
FSAFeds contribution limits are set by OPM and change each year. For 2024, the limit is $3,300 for self-only coverage and $6,550 for family coverage. These limits apply only to federal employees, retirees, and their families enrolled in FEHB.
HSA contribution limits are higher and apply to anyone with a may have access to HDHP. For 2024, the limit is $4,150 for self-only coverage and $8,300 for family coverage. These limits are indexed to inflation and increase most years. You can also make catch-up contributions of $1,000 if you are age 55 or older.
Enrollment timing is also different. FSAFeds enrollment happens only during the federal open season, typically November through December. If you miss that window, you cannot enroll until the next year unless you have a may have access to life event (such as marriage, birth, or loss of coverage). HSA enrollment can happen at any time—you simply open an account with a bank or financial institution as long as you have an HDHP.
What expenses each account covers
| Expense Type | FSAFeds | HSA |
|---|---|---|
| Doctor visits and hospital care | Yes | Yes |
| Prescription medications | Yes | Yes |
| Dental care (routine cleanings, fillings) | Yes | No |
| Vision care (routine exams, glasses, contacts) | Yes | No |
| Mental health treatment | Yes | Yes |
| Copays and coinsurance | Yes | Yes |
| Deductibles | Yes | Yes |
When to choose FSAFeds over an HSA (or vice versa)
If you are a federal employee, you do not have a choice between FSAFeds and an HSA—you can only use FSAFeds. However, you may be able to enroll in both if your FEHB plan is a high-deductible plan that qualifies as an HDHP. In that case, you could contribute to both accounts in the same year, as long as you stay within the contribution limits for each.
If you are not a federal employee, you can only open an HSA. FSAFeds is not available to you. If you have a high-deductible health plan through your employer or the marketplace, an HSA is a good option for setting aside pre-tax money for medical expenses. The lack of a use-it-or-lose-it rule makes it especially valuable if you want to build savings for future health costs or retirement.
If you have a traditional health plan (not a high-deductible plan) and are not a federal employee, you may be able to enroll in a Dependent Care FSA or Limited-Purpose FSA through your employer, but these are separate from FSAFeds and have their own rules and limits.
How to enroll in FSAFeds if you are may be able to access
Enrollment in FSAFeds happens through the Federal Employees Health Benefits Program (FEHB) during the annual open season. You enroll through your agency's benefits office or through the OPM's benefits website. You will need to decide how much to contribute for the upcoming plan year based on your expected medical, dental, and vision expenses.
Once you enroll, contributions are deducted from your paycheck before taxes are calculated, which reduces your taxable income. You can use your FSAFeds debit card to pay for may be able to access expenses at pharmacies, doctors' offices, and other providers. You can also submit receipts for reimbursement if you pay out of pocket.
If your circumstances change during the year—such as a change in family status, loss of coverage, or significant change in expected medical costs—you may be able to make changes outside the open season. Contact your agency's benefits office to ask about mid-year changes.
Frequently Asked Questions
Can I have both FSAFeds and an HSA at the same time?
Only if your FEHB plan qualifies as a high-deductible health plan. If it does, you can contribute to both FSAFeds and an HSA in the same year. However, this is rare—most FEHB plans are not structured as HDHPs. Check with your benefits office to confirm whether your plan qualifies.
What happens to my FSAFeds money if I leave federal employment?
You lose access to your FSAFeds account when you leave federal employment. Any unused balance is forfeited, even if you have not reached the end of the plan year. This is one reason to be conservative with your FSAFeds contributions if you think you may leave your job soon.
Can I invest my FSAFeds money like I can with an HSA?
No. FSAFeds is designed for spending, not investing. Your money sits in an account and earns little to no interest. HSAs, by contrast, can be invested in stocks, bonds, and mutual funds, allowing your balance to grow over time.
Do I have to spend all my FSAFeds money by the end of the year?
Almost. You can carry over up to $640 (as of 2024) to the next plan year, but any amount above that is forfeited. The carryover limit changes each year, so check with your benefits office for the current year's limit.
Can I use FSAFeds for my spouse or children?
Yes, if they are covered under your FEHB plan. You can use FSAFeds money to pay for may be able to access medical, dental, and vision expenses for yourself, your spouse, and your dependents. You do not need to be the one receiving the care.