HSA Basics
Health Savings Accounts are paired with high-deductible health plans. Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are untaxed.
Unused funds roll over from year to year, which makes HSAs a long-term healthcare spending vehicle rather than a short seasonal budget.
FSA Basics
Flexible Spending Accounts are employer-sponsored accounts funded with pre-tax dollars for qualified medical expenses.
Most FSA balances need to be used within the plan year, though some plans offer a limited rollover or grace period. That deadline creates much more urgency for shoppers.
Why Merchants Should Care
Combined HSA/FSA balances exceed $150 billion, and both account types represent incremental revenue channels for qualifying products.
FSA users often face year-end deadlines that create seasonal demand, while HSA users accumulate funds that can be used on eligible purchases whenever a need arises.
Key Differences at a Glance
The qualification flow at checkout can be identical even though the underlying account rules are different.
| Account feature | How HSA and FSA differ |
|---|---|
| Ownership | HSAs are owned by the individual, while FSAs are tied to an employer-sponsored plan. |
| Rollover | HSA funds roll over indefinitely; FSA funds are generally subject to use-it-or-lose-it rules. |
| Contribution limits | Both are capped annually, but the limits and plan rules differ. |
| Eligibility | HSAs require a high-deductible health plan; FSAs do not. |
| Investment options | HSAs may offer investment options over time, while FSAs are focused on near-term spending. |
Enabling Both at Checkout
A single qualification integration can support both account types because the shopper's account type does not change your checkout experience.
What matters is whether the purchase qualifies as medical care and, when necessary, whether a provider can issue an LMN to support reimbursement.
Next step
Start accepting HSA/FSA
Explore more