Can You Contribute to FSA and HSA in the Same Year?

Have you ever wondered if you can contribute to both a Flexible Spending Account (FSA) and a Health Savings Account (HSA) in the same year? Let's dive into this common query and explore the rules and regulations surrounding contributions to these two popular healthcare savings vehicles.

Firstly, it's important to note that both FSAs and HSAs offer tax advantages and can help you save money on eligible medical expenses. However, there are key differences between the two accounts:

• FSAs are offered by employers and have a 'use it or lose it' rule, meaning funds must be used by the end of the plan year or a grace period.
• HSAs are owned by individuals, are portable, have no 'use it or lose it' rule, and offer triple tax benefits.

Now, back to the question - can you contribute to both in the same year? The short answer is: it depends on certain factors, such as the type of FSA you have and your HSA eligibility. Here's a breakdown:

• If you have a Limited-Purpose FSA (LPFSA) that only covers dental and vision expenses, you can contribute to an HSA in the same year.
• If you have a General-Purpose FSA (a regular healthcare FSA), contributing to an HSA in the same year may disqualify you from HSA eligibility.
• If you have a Dependent Care FSA, it does not impact HSA eligibility, so you can contribute to both accounts simultaneously.

It's essential to check with your employer and review the specific plan details to understand what combination of accounts you can contribute to in a given year. Mixing up contributions to FSA and HSA can have tax implications and affect your eligibility for HSA benefits.

In conclusion, while it's not a straightforward yes or no, it's possible to contribute to both FSA and HSA in the same year under certain circumstances. Understanding the rules and nuances of these savings options can help you make informed decisions about managing your healthcare expenses efficiently.

Curious about the ability to contribute to both a Flexible Spending Account (FSA) and a Health Savings Account (HSA) in the same year? While this question often stirs confusion, understanding the nuances of each account is key to maximizing your savings potential.