Can You Have FSA and HSA in the Same Plan Year?

Many people wonder whether they can have both a Flexible Spending Account (FSA) and a Health Savings Account (HSA) in the same plan year. The answer to this question is not a simple yes or no as it depends on various factors and rules set by the Internal Revenue Service (IRS).

FSAs and HSAs are both tax-advantaged accounts that can help individuals save money on healthcare expenses. Here's a breakdown of the key differences between the two:

• FSAs are offered by employers and have a 'use it or lose it' rule, meaning any funds left unspent at the end of the plan year may be forfeited.
• HSAs are available to individuals with a high-deductible health plan (HDHP) and have a rollover feature, allowing funds to carry over from year to year.

So, can you have both FSA and HSA in the same plan year? Here are some considerations:

• Dual Participation: In general, you cannot have both an FSA and an HSA at the same time. However, there are exceptions to this rule:
• Limited Purpose FSA: If your FSA is limited to dental and vision expenses only, you can still contribute to an HSA.
• Post-Deductible FSA: If your FSA only covers expenses after you've reached your HDHP deductible, you can also have an HSA.
• Dependent Care FSA: Having a Dependent Care FSA does not affect HSA eligibility.

It's important to review your plan documents and consult with a tax professional to determine your eligibility and any restrictions that may apply.

When considering whether to utilize both a Flexible Spending Account (FSA) and a Health Savings Account (HSA) in the same plan year, it's essential to understand the implications of each account type based on IRS guidelines.