While an HSA is similar to a Medical FSA and HRA, there are several key differences. For example, an HSA has no “use-or-lose” provision as funds automatically carry over from year to year. The HSA is also portable if employment changes and funds can be invested. However, since an HSA provides an attractive tax benefit, the IRS sets the annual contribution limits, limits the types of other plans that can be offered alongside an HSA and requires that the HSA be combined with an HSA-compatible health plan.
