If your employer offers both Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs), you may be wondering if it’s possible to have both an HSA and an FSA account at the same time.
HSA/FSA Accounts
If you are enrolled in an HSA-eligible health plan, you can enroll in an HSA account as long as you aren’t also enrolled in Medicare or have some other, disqualifying coverage.
Traditional FSA accounts cover most of the same healthcare expenses as HSA accounts and are considered disqualifying coverage under IRS publication 969. However, you cannot enroll in a traditional FSA account if you are already enrolled in an HSA and vice-versa. You can, though, participate in what is known as a Limited Purpose FSA (LPFSA) at the same time as an HSA.
Limited FSA Accounts
Although FSAs and LPFSAs have the same annual contribution limit (learn more about this year’s contribution limits), LPFSAs can be used only for qualified dental and vision expenses. This is the only FSA you can have at the same time as an HSA. LPFSAs work just like traditional FSAs except for the limitation on eligible expenses.
Although dental and vision expenses are eligible for both HSAs and LPFSAs, you cannot use both accounts for the same expenses (a practice known as “double-dipping”).
Which Should I Use First?
If you have both HSA and LPFSA accounts, use the LPFSA funds first when you incur qualified dental and vision expenses. Just like traditional FSA accounts, LPFSA funds have to be used by the end of the plan year or within the grace period unless your plan includes carryover. However, your HSA funds have no expiration date. Unused funds roll over from year to year indefinitely. For this reason, you will want to use up your LPFSA funds before using any HSA funds for qualified dental and vision expenses.
So the answer is, no, you cannot have an HSA and FSA account at the same time. But you CAN have an HSA and LPFSA at the same time. For more information, talk with your benefits administrator.
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