Can You Have an HSA and FSA in 2021? Understanding the Basics of Health Savings Accounts and Flexible Spending Accounts

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Can you have both accounts?

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are both valuable tools that can help individuals save money on medical expenses, but many people wonder if they can have both in 2021. The answer is yes, but with some limitations and considerations.

Here's a breakdown of the key points to understand:

How HSAs and FSAs work together

• HSAs and FSAs serve similar purposes in allowing for pre-tax contributions to pay for eligible medical expenses.
• Some individuals may be eligible for both an HSA and an FSA in the same year.
• Having both accounts can provide added flexibility and coverage for medical expenses.
• However, there are some restrictions on how funds from both accounts can be used together.

Here are some important details to consider if you're thinking about having both an HSA and an FSA:

• Individuals can contribute up to $3,600 to an HSA in 2021 for self-only coverage or $7,200 for family coverage.
• Many employers also offer contributions to employee HSAs.
• FSAs have a contribution limit of $2,750 for 2021.
• Some expenses like over-the-counter medications may be eligible for reimbursement with an FSA but not with an HSA.
• Unused funds in an FSA typically do not roll over at the end of the year, while HSA funds can carry over from year to year.

Final guidance for using both accounts

Ultimately, having both an HSA and an FSA in 2021 can be a smart financial move, as long as you understand the rules and limitations of each account.

When navigating healthcare expenses, many people often ask, 'Can I have both an HSA and an FSA in 2021?' The answer is a resounding yes, but it's essential to know how these accounts can work together effectively.