Can I Have an FSA & an HSA at the Same Time?

Health care coverage changes every year. As insurance companies change what services their policies cover, they also change what they don’t cover. Flexible spending accounts and health savings accounts help pay for medical expenses that insurance doesn’t cover. Consumers need to know which accounts make sense for them. This involves understanding how these accounts work and whether maintaining both accounts simultaneously is allowed.

Flexible Spending Account

A flexible spending account, or FSA, allows you to contribute money from each paycheck into a special account. You can use this money to pay for medical expenses throughout the year. When you enroll in your company’s benefit plan, you determine how much you want to invest in the FSA. Your employer then divides that amount into equal deductions from each paycheck. The money you contribute to the FSA is tax-deductible and saves you money when you file your tax return.

Health Savings Account

A health savings account, or HSA, also gives you the ability to contribute money into a special savings account. The money in this account should be used to pay medical expenses. Some employers also contribute to these accounts on behalf of employees. To qualify to open an HSA, you must enroll in a high-deductible health insurance plan. These plans require you to pay a higher deductible than traditional insurance plans before receiving any insurance benefits. As with an FSA, your contributions are tax-deductible and reduce the money you owe on your taxes.


There are two significant differences between these two plans. One is what happens to the money at the end of the year. While you pay into the plan all year, you may or may not get to keep the money that’s left over. With an FSA, any money that is not spent during the year is lost. It helps pay administrative costs or becomes income for the plan. With an HSA, the account remains open and the money still belongs to you. The other difference involves when you can use the money. With an FSA, the total dollar contribution for the year is known and you can use that money at any time, even if you haven’t paid it all in yet. With an HSA, you cannot use the money until you’ve contributed it to the account.

Same Time?

As long as you meet the requirements to keep both accounts open, you can. To maintain an HSA, you must be enrolled in a high-deductible insurance plan. You may not be enrolled in Medicare and you may not be claimed as a dependent by another taxpayer. The only requirement for maintaining an FSA is that your employer offer that option. If you choose to maintain both an FSA and an HSA, consider how you will use the funds. Spend your FSA dollars first so that you don’t lose them.


About the Author

Kathy Adams McIntosh started writing professionally in 2001. She has been published in "Cup of Comfort," "Community Connection" and "Wisconsin Christian News." Adams McIntosh belongs to the Fearless Freelancers and the Broadway Writers Guild. She earned her Master of Business Administration from the University of Wisconsin.