HSA, FSA, HRA, ICHRA, QSEHRA, MSA. Your employer’s benefits packet, your Marketplace application and your Medicare mail can all use these letters, and they are not the same thing. Some accounts belong to you. Some belong to your employer’s plan. One is funded only by Medicare. And a few can change whether you qualify for Marketplace savings.
This guide compares HSA vs HRA vs FSA, plus the HRA types and the Medicare Medical Savings Account (MSA). For each one: who owns it, who can put money in, who qualifies, the current IRS limit, what happens to unused money, how it is taxed, and how it works with a Marketplace plan or Medicare.
This article is general education, not tax or legal advice. Instant Health Help is a licensed health insurance agency. We are not the IRS, HealthCare.gov, Medicare or an insurance company. Contribution limits change each year, so check the IRS sources listed at the end and talk to a tax professional about your own situation.
The short answer
- HSA (Health Savings Account): your money, in your name, for life. You need HSA-eligible coverage to put money in. Unused money stays and can be invested.
- Health FSA (Flexible Spending Arrangement): an employer plan funded mostly from your paycheck before taxes. Mostly use-it-or-lose-it, and it usually ends when you leave the job.
- HRA (Health Reimbursement Arrangement): employer money only. The employer sets the amount and the rules. Several types exist, and two of them (ICHRA and QSEHRA) are built to work with individual and Marketplace plans.
- Medicare MSA (Medical Savings Account): a type of Medicare Advantage plan. Medicare deposits money each year. You cannot add your own.
HSA vs FSA vs HRA vs Medicare MSA: side-by-side
| Feature | HSA | Health FSA | HRA (employer) | Medicare MSA |
|---|---|---|---|---|
| Who owns it | You | Your employer’s plan | Your employer’s plan | You (account set up through your Medicare MSA plan) |
| Who can put money in | You, your employer, or anyone on your behalf | You (pre-tax paycheck); employer may add | Employer only | Medicare only |
| Who qualifies | Covered by an HSA-eligible plan, no disqualifying coverage, not on Medicare, not claimed as a dependent | Employees whose employer offers one (not the self-employed) | Employees whose employer offers one (not the self-employed) | People with Medicare Parts A and B who join a Medicare MSA plan where one is offered |
| IRS limit (tax year shown) | 2026: $4,400 self-only, $8,750 family. 2027: $4,500 self-only, $9,000 family. Plus $1,000 catch-up at 55+ | $3,400 from salary reduction (2026) | No IRS cap for most HRAs; QSEHRA and Excepted Benefit HRA have caps (see below) | No contribution limit; the deposit is set by your plan |
| Unused money | Rolls over every year | Lost unless the plan offers a carryover (up to $680 for 2026) or a grace period (up to 2½ months) | Can carry forward if the plan allows | You do not have to spend it all each year |
| If you change jobs | Stays with you | Usually ends | Usually ends, depending on plan rules | Not tied to a job; if you leave the MSA plan mid-year you repay part of that year’s deposit |
| Federal tax treatment | Contributions deductible or pre-tax; growth and qualified withdrawals tax-free | Pre-tax in; tax-free reimbursements | Tax-free to you in and out | Deposits not taxed; qualified withdrawals tax-free |
| With a Marketplace plan | Yes, with an HSA-eligible plan (Exchange bronze and catastrophic plans count) | Cannot pay premiums; a general-purpose FSA blocks HSA deposits | Depends on the HRA type (ICHRA and QSEHRA are built for it) | Not applicable |
| With Medicare | Can spend it; cannot contribute once enrolled | Can keep using it while you still work | Often allowed (ICHRA, QSEHRA, retiree HRA) | It is a Medicare Advantage plan |
Dollar figures in this guide are the latest IRS limits published as of this writing, labeled by tax year. For HSAs, the IRS has published both 2026 and 2027 amounts; for FSAs and QSEHRAs, 2026 is the latest. They change each year. See the sources note below for the exact IRS document and tax year behind each number.
HSA (Health Savings Account)
- Who owns it: you. IRS Publication 969 calls an HSA “portable.” It stays with you if you change jobs or stop working.
- Who can contribute: you, your employer, or both. Family members or anyone else can also contribute for you.
- Eligibility: you must be covered by an HSA-eligible high deductible health plan (HDHP), have no other disqualifying health coverage, not be enrolled in Medicare, and not be claimed as someone else’s dependent.
- What counts as an HDHP: for 2026, a deductible of at least $1,700 (self-only) or $3,400 (family), with out-of-pocket costs capped at $8,500 or $17,000. For 2027, at least $1,750 or $3,500, with out-of-pocket costs capped at $8,700 or $17,400.
- IRS limit: $4,400 self-only or $8,750 family for 2026; $4,500 self-only or $9,000 family for 2027. If you are 55 or older, you can add a $1,000 catch-up contribution.
- Rollover: no use-it-or-lose-it. Unused money carries over every year.
- Tax treatment (federal): contributions are deductible or pre-tax through payroll, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. Other withdrawals are taxed and may face an extra 20% tax, unless you are 65 or older, disabled, or the withdrawal is made after death. State tax rules can differ.
HSA with a Marketplace plan
This is the newer angle many people miss. The IRS says that as of January 1, 2026, bronze and catastrophic plans available through an Exchange are treated as HSA-compatible, even if they don’t meet the usual HDHP definition. Other Marketplace plans can still qualify if they meet the HDHP rules. Look for “HSA-eligible” in the plan details, and see our guide to bronze vs silver vs gold Marketplace plans.
You can get premium tax credits and contribute to an HSA in the same year. Just keep in mind that HSA money generally can’t pay Marketplace premiums. Pub 969 limits premium use to a few cases, such as COBRA, coverage while you get unemployment benefits, long-term care, and Medicare premiums at 65 or older.
HSA with Medicare: the 6-month lookback
- Contributions stop at Medicare: starting with the first month you are enrolled in Medicare (including Part A only), your HSA contribution limit is zero.
- Part A can be backdated: Medicare.gov says premium-free Part A starts up to 6 months before the date you apply for Medicare or Social Security, but not before the first month you were eligible. HSA money contributed during those backdated months counts as an excess contribution.
- What Medicare.gov recommends: stop HSA contributions, both yours and your employer’s, at least 6 months before you apply for Medicare or start Social Security.
- You can still spend it: HSA money can pay Medicare Part B, Part D and Medicare Advantage premiums, along with deductibles and copays. It cannot pay Medigap (Medicare Supplement) premiums tax-free.
Still working past 65 with an HSA? Read should you delay Part B if you still work before you pick a Medicare start date.
Health FSA, Limited-Purpose FSA and Dependent Care FSA
- Who owns it: your employer’s cafeteria plan. The money is set aside for you, but the plan’s rules control it.
- Who can contribute: you, through pre-tax salary reduction. Your employer may also contribute.
- Eligibility: employees whose employer offers one. Pub 969 says self-employed people aren’t eligible for FSAs.
- IRS limit: $3,400 in salary reductions for 2026 plan years (the 2027 amount isn’t published yet). Your employer can set a lower cap.
- Rollover: FSAs are generally use-it-or-lose-it. A plan may offer either a carryover (up to $680 for 2026 plan years) or a grace period of up to 2½ months after the plan year.
- Portability: it is tied to your job and usually ends when you leave.
- Tax treatment: money goes in before income tax and payroll taxes, and reimbursements for qualified medical expenses are tax-free.
- With a Marketplace plan: an FSA can’t reimburse health insurance premiums. If you or your spouse has a general-purpose health FSA that covers you, you generally can’t contribute to an HSA.
- With Medicare: if you are still working and on Medicare, you can keep using an employer FSA for out-of-pocket costs. It can’t pay your premiums.
Limited-Purpose FSA (LPFSA): works the same way but only pays for things like dental and vision care, plus preventive care. Because it doesn’t pay general medical bills, Pub 969 says you can have one and keep contributing to an HSA. It falls under the same health FSA salary-reduction limit.
Dependent Care FSA: this one is not medical. It pays for child care or adult dependent care so you can work. The IRS says the yearly exclusion rose to $7,500 per household ($3,750 if married filing separately) beginning in 2026. Don’t use it for doctor bills.
HRAs: five types, one rule (employer money only)
Every HRA is funded only by the employer. You can’t put your own paycheck money in. Reimbursements for qualified medical expenses are tax-free to you, and Pub 969 says unused amounts can carry forward if the plan allows. Self-employed owners can’t use an HRA for themselves. The five types differ in who can offer them, whether there’s a cap, and how they work with Marketplace coverage.
| HRA type | Who can offer it | IRS limit | With a Marketplace plan | With Medicare |
|---|---|---|---|---|
| ICHRA (HealthCare.gov now calls it a CHOICE Arrangement) | Employers of any size, instead of a group plan | No minimum or maximum | You need individual coverage. You can get premium tax credits only if the offer is unaffordable and you opt out. | Can be used with Parts A and B, or Medicare Advantage |
| QSEHRA | Small employers (fewer than 50 full-time employees) with no group health plan | $6,450 self-only, $13,100 family (2026) | You need qualifying coverage. If it’s unaffordable, your tax credit is reduced by the QSEHRA amount. | Medicare counts as qualifying coverage |
| Group / integrated HRA | Employers that also offer a group health plan | No IRS cap | Tied to the employer plan, so it isn’t a way to pay for a Marketplace plan | Follows your employer plan while you’re still working |
| Excepted Benefit HRA | Employers that also offer a group plan (you don’t have to enroll in it) | $2,200 for 2026 plan years; $2,250 for 2027 | Can’t pay individual health insurance premiums. Your tax credit eligibility depends on the group plan offer. | Depends on the plan’s terms |
| Retiree HRA | Employers, for former employees | No IRS cap | Tell the Marketplace about it. It can affect your eligibility for savings. | A common way retirees get help with Medicare costs |
ICHRA (CHOICE Arrangement)
HealthCare.gov now calls this a CHOICE Arrangement (formerly the Individual Coverage HRA, or ICHRA). It lets an employer of any size reimburse premiums and out-of-pocket costs instead of offering a traditional group plan. You and any covered family members must have individual health insurance, from the Marketplace or a private plan, or Medicare Parts A and B or Medicare Advantage. Short-term plans and dental- or vision-only plans don’t count. Getting an ICHRA offer can also qualify you for a Special Enrollment Period.
QSEHRA
The Qualified Small Employer HRA is for employers with fewer than 50 full-time employees who don’t offer a group health plan. It must be offered on the same terms to all full-time employees, and the IRS caps the yearly amount (the IRS limit for 2026 is $6,450 self-only or $13,100 family). You need qualifying health coverage, such as a Marketplace plan or Medicare, to use the money.
Group (integrated) HRA
This one is paired with your employer’s group health plan and usually helps with that plan’s deductible and copays. You generally have to be enrolled in the group plan to use it. A general-purpose HRA blocks HSA contributions, but a limited-purpose, post-deductible or suspended HRA may not (Pub 969).
Excepted Benefit HRA
An employer that offers a group plan can add a smaller Excepted Benefit HRA, even for employees who turn down the group plan. The IRS limit on new money each year is $2,200 for plan years starting in 2026 and $2,250 for plan years starting in 2027. It can’t reimburse individual health insurance premiums, but it can help with things like out-of-pocket costs and dental or vision.
Retiree HRA
A retiree-only HRA pays expenses you have after you retire. Many retirees use it toward Medicare premiums and out-of-pocket costs, depending on what the plan covers. Pub 969 says that once you are retired with a retiree HRA, you can no longer contribute to an HSA. If you are under 65 and shopping on the Marketplace, list the retiree HRA on your application.
Medicare Medical Savings Account (MSA)
- What it is: Medicare.gov describes it as a consumer-directed Medicare Advantage plan with two parts: a high-deductible health plan and a savings account.
- Who owns it: you. The account is set up with a bank or other financial institution through your plan.
- Who can contribute: Medicare only. Pub 969 says you can’t add your own money. The plan makes the deposit once at the start of the year, or in your first month if you join mid-year, prorated.
- Eligibility: you need Medicare and must join a Medicare MSA plan, and very few areas offer one. Check Medicare’s Plan Compare tool for your ZIP code.
- Limit: there is no contribution limit for you, because you can’t contribute. The deposit amount and deductible are set by the plan.
- Rollover and portability: you don’t have to spend the account down each year. If you leave the MSA plan before the year ends, Medicare.gov says you repay part of that year’s deposit.
- Tax treatment: deposits aren’t taxed, and withdrawals for qualified medical expenses are tax-free. Medicare.gov’s example shows a 50% tax penalty, plus income tax, on a non-medical withdrawal.
- Good to know: there’s no separate plan premium, but you still pay your Part B premium. It doesn’t include Part D drug coverage, so you’d need a separate drug plan.
Don’t confuse it with a Medicare Savings Program. A Medicare Savings Program is state help with Part B premiums for people with limited income. Ask us or your state Medicaid office if you need that kind of help.
How premium tax credits interact with ICHRA and QSEHRA
Premium tax credits lower your Marketplace premium. An ICHRA or QSEHRA offer changes that math, and the key word is affordable.
- How HealthCare.gov tests affordability: start with the monthly premium for the lowest-cost self-only Silver plan available to you and subtract the monthly HRA amount. If what’s left is less than a set percentage of 1/12 of your household income, the HRA counts as affordable. HealthCare.gov lists 9.96% for 2026 plans and 10.22% for plan years starting in 2027.
- ICHRA, affordable: you and your household can’t get the premium tax credit, even if you turn the ICHRA down.
- ICHRA, not affordable: you choose either the ICHRA or the tax credit, not both. To use the tax credit, you must opt out of the ICHRA.
- QSEHRA, not affordable: you can use both, but your tax credit is reduced by the QSEHRA amount. HealthCare.gov suggests subtracting your monthly QSEHRA amount when you choose how much credit to take in advance.
- Either type: if you take more advance credit than you qualify for, you may have to pay back the difference when you file. Report the HRA type, amount and start date on your application.
New to tax credits? Start with how Marketplace tax credits work in plain English.
Which one fits you?
Self-employed (no employees)
FSAs and HRAs aren’t available to you as the owner. An HSA is usually your tool: pick an HSA-eligible Marketplace plan (Exchange bronze and catastrophic plans count) and contribute on your own. You can still qualify for premium tax credits based on your estimated income.
Small-business owner with employees
Compare a QSEHRA (fewer than 50 full-time employees, no group plan, IRS cap), an ICHRA (any size, no cap, built-in affordability test), and traditional group coverage. Think about how your offer affects each employee’s tax credit. Our small business owner Marketplace guide covers the coverage side.
W-2 employee
Read the benefits packet closely. If you’re offered an HDHP, an HSA, often paired with a limited-purpose FSA for dental and vision, keeps your money growing. If your plan isn’t HSA-eligible, a health FSA covers predictable costs. If you get an ICHRA or QSEHRA letter, run the affordability check before you shop on the Marketplace.
Turning 65
Map your HSA stop date to the 6-month Part A lookback before you apply for Medicare or Social Security. Keep spending the balance on eligible Medicare costs. If an employer offers a retiree HRA or ICHRA, ask what Medicare costs it reimburses. A Medicare MSA is an option only if one is offered in your area. Our turning 65 Medicare countdown lays out the timing.
Frequently asked questions
What is the main difference between an HSA, an HRA and an FSA?
Ownership and funding. An HSA is your own account, and you need HSA-eligible coverage to contribute. A health FSA is an employer plan funded mostly from your pre-tax pay and is generally use-it-or-lose-it. An HRA is funded only by your employer, which sets the amount and rules.
Can I open an HSA with a Marketplace plan?
Yes, if the plan is HSA-eligible and you meet the other HSA rules. Under a recent federal law change, the IRS treats bronze and catastrophic plans available through an Exchange as HSA-compatible. Other plans can qualify if they meet the HDHP rules.
Can I contribute to my HSA after I enroll in Medicare?
No. Your contribution limit is zero starting the first month you are enrolled in Medicare. Premium-free Part A can be backdated up to 6 months, so Medicare.gov suggests stopping HSA contributions at least 6 months before you apply. You can keep spending the money on eligible costs.
Can I have an HSA and an FSA at the same time?
Not with a general-purpose health FSA that covers you. You can pair an HSA with a limited-purpose FSA for dental, vision and preventive care. A Dependent Care FSA doesn’t affect HSA eligibility, because it isn’t medical.
If my employer offers an ICHRA, can I still get a premium tax credit?
Only if the ICHRA is unaffordable for you and you opt out of it. If the offer is affordable, you and your household can’t get the tax credit, even if you decline the ICHRA.
Is a Medicare MSA the same as a Medicare Savings Program?
No. A Medicare MSA is a type of Medicare Advantage plan that comes with a Medicare-funded savings account. A Medicare Savings Program is state help paying Medicare costs like the Part B premium for people with limited income and resources.
Want a second set of eyes on your options?
We help people compare Marketplace plans, including HSA-eligible options, check how an ICHRA or QSEHRA letter affects their savings, and plan the move from an HSA to Medicare. Help in English or Spanish. Licensed in Florida, Texas, Michigan, Tennessee, New York and New Jersey.
Call (321) 315-0054 | agent@inshh.com | Lobsang Rivas, licensed agent, NPN 18838086
Sources
- HSA limits, HDHP minimum deductible and out-of-pocket figures, and the Excepted Benefit HRA limit: IRS Rev. Proc. 2025-19 (2026 amounts) and IRS Rev. Proc. 2026-24 (2027 amounts). The $1,000 HSA catch-up is set by law.
- Health FSA salary-reduction limit and carryover, and the QSEHRA limit: IRS Rev. Proc. 2025-32 (2026 amounts, the latest the IRS has published; 2027 amounts are expected in the IRS’s fall inflation release).
- HSA, FSA, HRA and Medicare Advantage MSA rules: IRS Publication 969.
- Bronze and catastrophic plans treated as HSA-compatible: IRS news release IR-2025-119.
- Dependent Care FSA exclusion: IRS Publication 15-B.
- ICHRA affordability percentage: IRS Rev. Proc. 2026-26.
- HRAs and Marketplace savings: HealthCare.gov Marketplace coverage & HRAs, Individual coverage HRAs, CHOICE Arrangements, QSEHRA and Next steps for your QSEHRA.
- Medicare and HSAs: Medicare.gov Working past 65. Medicare MSA plans: Medicare.gov Medicare MSA Plans.
Not tax advice: account rules and limits change each year, and your plan documents and state tax rules matter. Talk to a tax professional before you contribute, withdraw or change coverage.
We do not offer every plan available in your area. Currently we represent 10 organizations which offer 489 products in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.
1-800-MEDICARE (1-800-633-4227; TTY 1-877-486-2048) is available 24 hours a day, 7 days a week, except some federal holidays. Instant Health Help is not connected with or endorsed by the U.S. government or the federal Medicare program.