Both Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) allow pre-tax medical spending, but their ownership, rollover rules, and freelancer eligibility differ fundamentally.
HSA: The Triple-Tax-Advantaged Powerhouse
- 100% Owned by You: Funds roll over year after year indefinitely and invest in index funds.
- Triple Tax Advantage: Tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.
- Freelancer Eligible: You can open an HSA independently at Fidelity, Lively, or HealthEquity if enrolled in an HDHP.
FSA: Employer-Tied and Use-It-Or-Lose-It
- Generally only available through W-2 corporate employers.
- Subject to strict annual expiration rules where unused funds revert to the employer.