What is the most important practical difference between a Flexible Spending Account (FSA) and a Health Savings Account (HSA)?

The most significant difference is the use-it-or-lose-it rule that applies to FSAs but not HSAs. FSA funds generally must be spent by the end of the plan year, though employers can offer a grace period or allow a rollover of up to $640 (in 2024). HSA balances roll over indefinitely, can be invested in mutual funds and stocks, and are portable — meaning they stay with you even if you leave your job or change health plans. However, to contribute to an HSA, you must be enrolled in a qualifying high-deductible health plan.