HSAs and Flexible Spending Accounts (FSAs)

How do HSAs work with FSAs?

You may have heard that you cannot be enrolled in both an Health Savings Account (HSA) and a Flexible Spending Account (FSA) at the same time; however, there are some scenarios in which the HSA and FSA can work together.

IRS regulations do prevent employees from contributing to both an HSA and a full Medical FSA in the same year. However, you may pair your HSA with a Limited Purpose FSA, if it is a option provided by your employer. A Limited Purpose FSA is subject to the same rules as a traditional Medical FSA, but it is limited to covering dental and vision expenses only. For a list of eligible Limited Purpose expenses, click here.

If you are currently contributing to an HSA and you (or your eligible dependents) have out-of-pocket dental or vision expenses, putting aside a portion of your income into a Limited Purpose FSA provides you with pre-tax money to use throughout the year and allows to save more of your HSA money for the future. Remember: money in your HSA never expires, whereas money contributed to an FSA — including a Limited Purpose FSA — must be used within your specified plan year.

You may also contribute to a Dependent Care FSA while also actively contributing to an HSA. A Dependent Care FSA allows you to put aside a portion of your income, pre-tax, to use during your plan year to pay for eligible childcare or daycare expenses for eligible dependents. This plan does not conflict with an HSA; enrolling in both accounts is allowable under IRS rules.