Can You Have an HSA and Participate in a Flexible Spending Account?

Having a Health Savings Account (HSA) and participating in a Flexible Spending Account (FSA) may seem confusing, but it is possible to have both under certain circumstances.

An HSA is a tax-advantaged savings account that allows individuals to save for qualified medical expenses, while an FSA is another type of account that also helps individuals save money on medical expenses.

Here's what you need to know about having both an HSA and an FSA:

• Eligibility: To have an HSA, you must be enrolled in a High Deductible Health Plan (HDHP), and you cannot have any other health coverage that is not an HDHP. On the other hand, FSAs are typically offered by employers as a benefit, and most employees are eligible to participate regardless of their health plan.
• Coordination: You cannot contribute to both an HSA and a general-purpose FSA at the same time. However, you can have a Limited-Purpose FSA, which only covers certain medical expenses like dental and vision care, while still contributing to your HSA.
• Rollover: One of the key differences between an HSA and an FSA is the rollover feature. HSA funds rollover from year to year, allowing you to build a significant savings over time. In contrast, most FSA funds do not roll over at the end of the year, so you may lose any unused funds. Some employers offer a grace period or a carryover option for FSAs, but it is important to check with your employer's plan.

While it is possible to have both an HSA and an FSA, it is essential to understand the rules and limitations to maximize the benefits of each account. Consult with a financial advisor or your employer's benefits specialist to determine the best strategy for your individual circumstances.

Yes, you can have both an HSA and an FSA, but understanding how each account works will help you smartly manage your healthcare expenses.