HSA vs FSA at Open Enrollment: Which to Pick for 2027

HSA vs FSA at Open Enrollment: Which One to Pick for 2027

HSA vs FSA at open enrollment is less of a choice than it looks, because the health plan you pick decides it. A health savings account (HSA) is only open to you if you choose a high deductible health plan (HDHP) that qualifies. For 2027, the IRS limit is $4,500 for self-only coverage and $9,000 for family coverage, and the money rolls over year to year. A health flexible spending account (FSA) works with most employer plans, but money you do not spend by the plan's deadline is generally lost. So pick the health plan first, then the account that goes with it, and then write down the dates the account brings with it.

The short version

Both accounts let you pay for medical costs with money that is not taxed, through your paycheck. They differ in who can open one and what happens to money you do not spend.

	HSA	Health FSA
Who can open one	Only people covered by an HSA-eligible high deductible plan	People whose employer offers one, with most plans
2027 limit	$4,500 self-only, $9,000 family (IRS)	2026 limit is $3,400; IRS had not announced 2027 on Oct 23, 2026
Money left at year end	Stays in the account and rolls over	Generally lost, unless the plan has a grace period or a carryover
If you change jobs	The account stays with you	Depends on the employer plan
Use with the other	A limited-purpose FSA can sit alongside an HSA	A general health FSA blocks HSA contributions

The HSA numbers come from the IRS's Revenue Procedure 2026-24. The 2026 FSA limit and carryover are from the IRS's 2026 inflation adjustments. The rules on eligibility and leftover money are in IRS Publication 969.

Who can open an HSA

The IRS sets four conditions in Publication 969. To contribute to an HSA you must:

be covered by an HSA-eligible high deductible health plan on the first day of the month,
have no other health coverage, apart from a short list of exceptions,
not be enrolled in Medicare,
not be claimed as a dependent on someone else's tax return.

For 2027, a plan counts as high deductible if the deductible is at least $1,750 for self-only coverage or $3,500 for family coverage, and out-of-pocket costs are capped at $8,700 or $17,400. Your benefits guide usually marks which plans are "HSA-eligible," so you do not have to work this out yourself.

The "no other coverage" rule is the one that trips people up. A general health FSA counts as other coverage, so you cannot have one and contribute to an HSA at the same time. That can include a spouse's general FSA, if it can pay your medical costs. A limited-purpose FSA, which covers things like dental and vision care, is allowed alongside an HSA.

What happens to money you do not spend

HSA: it stays. Publication 969 says amounts left at the end of the year carry over, and the account stays with you if you change employers or leave the workforce.

Health FSA: the IRS calls FSAs generally "use-it-or-lose-it." A plan may soften that in one of two ways, not both:

a grace period of up to two and a half months after the plan year ends, to spend what is left, or
a carryover of a limited amount into the next year. For plans that start in 2026, the most a plan can let you carry over is $680.

Your plan documents say which one you have, if either. That one detail decides how careful you need to be with the amount you elect. Our guide to the FSA deadline covers how to use the money before it is gone.

How to choose, in three questions

Which health plan are you picking for 2027? If it is not an HSA-eligible high deductible plan, the HSA is off the table. Look at the health FSA.
If you pick an eligible plan, can you cover the deductible? A high deductible plan means paying more before coverage starts. The HSA is where you set money aside for that, so the account and the plan are one decision.
How sure are your costs? For an FSA, elect only what you are confident you will spend: regular prescriptions, planned dental work, glasses, a known procedure. For an HSA, a cautious guess is less risky, because unspent money stays.

This is general information from IRS rules, not tax advice. Your employer's plan documents set the details, including any employer contribution and the claims deadline.

The dates that come after the choice

Choosing is one date. The account brings several more, and most of them are a year away, which is why they get lost:

Before the enrollment window closes, a short check:

Know your enrollment deadline, from the HR email or benefits portal.
Check whether your 2027 plan is HSA-eligible. The benefits guide usually says so.
Check for a spouse's general FSA. If it covers you, it can block HSA contributions.
Estimate the medical costs you are sure of.
Find out whether your FSA has a grace period or a carryover.
Save the confirmation after you submit. It shows your plan and the amount you elected.

Our open enrollment checklist covers the rest of the benefits form.

Where Tracy fits

Tracy, the assistant in dEssence, does not pick plans, file claims or connect to your benefits portal. She keeps the dates you send her and comes back with them.

When the open enrollment email arrives, paste it into Tracy or send a screenshot from Telegram, Chrome or the web. She notes the deadline and reminds you before it. After you enroll, send the confirmation and the plan's FSA dates: the end of the plan year, any grace period, the claims deadline. Ask her to remind you in the fall to check what is left to spend. These dates sit alongside the other open enrollment deadlines you already track.

Frequently asked questions

Can I have both an HSA and an FSA?

Not a general health FSA. It counts as other coverage, so you cannot contribute to an HSA while you have one. A limited-purpose FSA, for dental and vision care, can sit alongside an HSA.

What is the HSA limit for 2027?

$4,500 for self-only coverage and $9,000 for family coverage, per IRS Revenue Procedure 2026-24.

What is the FSA limit for 2027?

The IRS had not announced it as of October 23, 2026. The 2026 limit is $3,400, with a maximum carryover of $680. Your employer's enrollment materials will show the 2027 number once it is set.

Is an HSA better than an FSA?

Neither is better in general. An HSA keeps unspent money and stays with you, but requires an eligible high deductible plan. An FSA works with most plans but is generally use-it-or-lose-it.

Can I change my FSA amount after open enrollment?

Usually not mid-year. Plans generally allow changes only after certain life events, such as marriage or a new child. Your plan's rules decide.