Can You Have Both an HSA and a Flexible Spending Account at the Same Time?
You can have both an HSA and a dependent care FSA, but not an HSA and a health care FSA
The IRS allows you to hold an HSA and a dependent care flexible spending account (FSA) at the same time. You cannot, however, hold an HSA and a health care FSA together in the same year. If you try, you lose the HSA's tax-deductible status and cannot contribute to it.
The reason is straightforward: a health care FSA and an HSA both pay for the same medical expenses, and the IRS treats them as duplicative. A dependent care FSA pays for child care or adult day care, which is a different category of expense entirely, so the conflict does not exist.
If you currently have a health care FSA and want to switch to an HSA, you must first stop contributing to the FSA. You can keep the money already in the FSA and spend it down, but you cannot add new contributions while you hold an HSA.
Key Takeaways
- An HSA and a dependent care FSA can coexist; an HSA and a health care FSA cannot in the same year.
- If you have a health care FSA, you forfeit HSA tax benefits if you contribute to both simultaneously.
- Money already in a health care FSA can be spent after you stop contributing and switch to an HSA.
- Dependent care FSAs have a separate spending limit ($5,000 per household per year as of 2024, though this varies by employer) and do not conflict with HSA rules.
Why the IRS blocks an HSA and health care FSA together
Both accounts are designed to reduce your taxable income by letting you set aside pre-tax dollars for medical costs. If you could use both simultaneously, you would be able to shelter more income than the law allows, and you could potentially pay for the same expense twice using tax-advantaged money.
The IRS considers this double-dipping. To prevent it, the agency created a rule: if you contribute to a health care FSA during a calendar year, you cannot contribute to an HSA that same year. The restriction applies even if you only contribute to the FSA for part of the year.
This rule does not apply to dependent care FSAs because they cover a completely different set of expenses. Dependent care FSAs pay for child care, preschool, or adult day care — costs that an HSA cannot cover. Since there is no overlap, you can use both accounts without triggering the conflict.
How to switch from a health care FSA to an HSA
If you have a health care FSA and want to move to an HSA, the process takes planning but is not complicated. First, stop contributing to the FSA. You do this during your employer's open enrollment period or when you experience a may have access to life event (marriage, birth, loss of coverage, or a change in your employer's plan).
Money you have already set aside in the FSA remains yours to spend. You can continue to withdraw from it to pay for may be able to access medical expenses even after you stop contributing. The FSA will have a deadline — usually the end of the plan year plus a grace period of up to 2.5 months — by which you must use the remaining balance or lose it.
Once you stop contributing to the health care FSA, you become may be able to access to contribute to an HSA if you are enrolled in an HSA-may be able to access high-deductible health plan (HDHP). You can then open an HSA with a bank, credit union, or insurance company and begin making contributions in the same calendar year you stopped funding the FSA.
The dependent care FSA difference
A dependent care FSA is separate from a health care FSA. It exists to help you pay for child care or adult day care using pre-tax dollars. Because it does not overlap with HSA-may be able to access expenses, you can hold a dependent care FSA and an HSA at the same time without any tax penalty.
The annual contribution limit for a dependent care FSA is set by your employer but cannot exceed $5,000 per household per year (or $2,500 if you are married and file taxes separately). This limit is separate from your HSA contribution limit, which means you can contribute the maximum to both accounts in the same year.
If your employer offers both a dependent care FSA and an HSA-may be able to access health plan, you can enroll in both during open enrollment. Just make sure you do not also enroll in a health care FSA, which would block your HSA contributions.
What happens if you accidentally contribute to both an HSA and health care FSA
If you contribute to both an HSA and a health care FSA in the same year without realizing the conflict, you have a window to fix it. The IRS allows you to correct the mistake by withdrawing the excess contribution from one of the accounts before you file your tax return.
If you do not catch the error before filing, you will owe taxes on the HSA contribution that should not have been made, plus a 6 percent excise tax on the excess amount for each year it remains in the account. You will also lose the HSA's tax-deductible status for that year.
The safest approach is to confirm with your employer's benefits administrator before open enrollment which accounts you are currently enrolled in. If you have a health care FSA and want to switch to an HSA, ask them to help you time the transition so there is no overlap.
HSA and FSA contribution limits side by side
| Account Type | 2024 Annual Limit | Can Coexist with HSA? |
|---|---|---|
| HSA (individual coverage) | $4,150 | N/A |
| HSA (family coverage) | $8,300 | N/A |
| Health Care FSA | $3,200 (employer-set, varies) | No |
| Dependent Care FSA | $5,000 per household | Yes |
Frequently Asked Questions
Can I use my old health care FSA money after I switch to an HSA?
Yes. Money you have already contributed to a health care FSA remains yours even after you stop contributing and switch to an HSA. You can continue to withdraw it to pay for may be able to access medical expenses until your FSA plan year ends. After that date, any unused balance is forfeited.
What if my employer only offers a health care FSA, not an HSA?
You cannot have both. If your employer does not offer an HSA-may be able to access plan, you cannot open an HSA through them. You could open an individual HSA if you are enrolled in an HDHP outside of work, but you still could not contribute to your employer's health care FSA at the same time.
Does my spouse's FSA affect my HSA?
No. HSA and FSA rules apply to each person individually. If your spouse has a health care FSA, that does not prevent you from contributing to an HSA. However, if you are both covered under a family HSA, your spouse cannot contribute to a health care FSA.
Can I have a health care FSA and a dependent care FSA at the same time?
Yes. These are two separate accounts that cover different expenses. You can enroll in both during open enrollment. Just remember that if you also want an HSA, you must not have the health care FSA.
What counts as a may have access to life event to switch from FSA to HSA?
Common may have access to events include losing your FSA coverage, gaining HSA-may be able to access coverage, marriage, divorce, birth or adoption of a child, or a significant change in your employer's plan. Contact your benefits administrator to confirm whether your situation qualifies for a mid-year change.