Woman on laptop looking up if you can have an HSA and FSA at the same time

Can you have an HSA and FSA at the same time?

Medically reviewed on January 3, 2023 by Jillian Foglesong Stabile, MD, FAAFP. To give you technically accurate, evidence-based information, content published on the Everlywell blog is reviewed by credentialed professionals with expertise in medical and bioscience fields.

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Health savings account (HSA) and flexible spending account (FSA) can help you reduce your healthcare expenses. That’s because these tax-sheltered accounts enable you to pay for eligible medical expenses using tax-free money [1].

That can certainly be an advantage if you’re aiming to reduce your medical costs. But if you’re seeking to reap the most benefits from these opportunities, you might also ask: Can you have an HSA and FSA at the same time?

The answer is sometimes yes—but it depends on the kinds of accounts you have. Below, we’ll explore your options. We’ll also review the differences between FSAs and HSAs so you can choose the one that’s right for you.

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Can you use both an HSA and FSA for healthcare expenses?

You may be able to have an FSA and HSA at the same time. However, it depends on which type of FSA account you have.

The three types of FSA accounts are as follows [2]:

  • Healthcare FSA – These can be used for a wide variety of out-of-pocket healthcare expenses.
  • Limited purpose FSA – These accounts can only cover out-of-pocket dental and vision expenses.
  • Dependent care FSA – These can help you pay for the care of dependents such as children under the age of 13, children with disabilities, or elderly parents.

You can’t have a healthcare FSA and an HSA at the same time, since they’re both used to pay for the same types of expense—your medical costs [2].

However, you can have a limited-purpose or dependent care FSA and an HSA simultaneously. So, for example, you could use a limited-purpose FSA to pay for just your dental and vision expenses, while using an HSA to cover your other healthcare costs.

Should you choose an FSA or HSA?

Since you can’t have a healthcare FSA and an HSA at the same time, you’ll need to choose one over the other. So which one is better?

Let’s review FSAs and HSAs in greater detail to find out.

How do FSAs work?

FSAs can be opened through your employer. Once your account is set up, you can contribute tax-free money to it throughout the year.

You must decide how much you want to contribute to your FSA at the start of your enrollment. In 2023, the annual FSA contribution limit is $3,050 per year per employer [3]. Each month, your employer will take out your monthly contribution from your paycheck automatically.

What can FSA be used for? One cool feature of FSAs is that you gain instant access to your total annual contribution amount from the very first day of enrollment. For instance, if you decide to contribute $3,050 for the year, you can spend up to that amount even if you’ve only contributed a small portion of it so far.

While FSAs have many perks, they also have some limitations. For instance:

  • With an FSA, your employer technically owns the account, not you. That means that you can lose all your FSA savings if you get fired or leave your job.
  • Another important thing to note is that your FSA funds won’t roll over from year to year. You must spend your entire savings by the end of the year or you’ll lose them. The only exception is if your employer offers a rollover feature, which may allow you to roll over up to $610 or continue spending last year’s FSA money for the first two and a half months of the new year [3].

How do HSAs work?

HSAs are similar to FSAs, but they differ in the following ways:

  • You must be enrolled in a high deductible health plan (HDHP) – Now, how to start an HSA account? While FSAs can be used with any type of employer-sponsored health plan, HSAs can only be used with HSA-eligible HDHPs [4]. HDHPs usually have lower monthly premiums and higher deductibles. In turn, they’re an attractive option for people who are relatively healthy. However, they may not be adequate for people with chronic health conditions or who expect to have higher healthcare expenses throughout the year.
  • You can only spend your current contributions – With an HSA, you can only withdraw the money you’ve already personally contributed. You won’t gain access to early funds based on an annual contribution commitment, as you would with an FSA. However, the maximum HSA contribution amounts are slightly higher for HSAs than FSAs—in 2023, the annual limits are $3,850 for individuals and $7,750 for families [5].

While HSAs have some limitations, they also offer the following benefits:

  • HSA savings roll over year to year – The money you contribute to your HSA rolls over each year, so you can keep it forever (or until you spend it). Once you turn 65, you can use the money from your HSA to pay for anything—you’re no longer limited to qualifying medical expenses [5].
  • You own your HSA account – With an HSA, you own the account. As a result, your savings will stay with you even if you get fired, change jobs, become self-employed, or retire.
  • You can open an HSA on your own – While you can open an HSA through your employer, you can also open one independently with an HSA provider.
  • HSA funds can be invested – An HSA can serve as a tax-sheltered investment account, similar to an IRA or 401(k). You can invest your HSA funds into stocks, bonds, or mutual funds and watch your savings grow over time. The best part? All your investment gains will be tax-free too.

HSA vs. FSA: Which one should you choose?

As you can see, HSAs and FSAs can both help you save money on out-of-pocket healthcare expenses. FSAs may be a better option for people who don’t want to enroll in a high deductible health plan. They also stand out for their immediate annual contribution access.

That said, an HSA may be better if you’re self-employed or want to use your account to invest for retirement.

Everlywell: use your HSA or FSA to pay for at-home lab tests or telehealth visits

Finding the right options to cover your healthcare costs can provide significant piece of mind. But it’s equally important to have access to affordable, transparently priced healthcare when you need it.

No matter which type of account you choose, you can access at-home lab tests or telehealth services from Everlywell with no surprise bills. And yes, you can use your tax-free FSA or HSA contribution to pay for them.

Want to learn more? Explore our convenient health and wellness products and services at Everlywell today.

Are Everlywell tests covered by FSA/HSA?

How to start an HSA account: what you need to know

What can an FSA be used for?

References

  1. Publication 969 (2021), Health Savings Accounts and other tax-favored health plans. Internal Revenue Service. URL. Accessed December 12, 2022.
  2. The difference between a flexible spending account (FSA) and a Health Savings Account (HSA). National Institutes of Health. URL. Published November 9, 2020. Accessed December 12, 2022.
  3. The difference between a flexible spending account (FSA) and a Health Savings Account (HSA). National Institutes of Health. URL. Published November 9, 2020. Accessed December 12, 2022.
  4. Health Savings Account (HSA) - glossary. Glossary | HealthCare.gov. URL. Accessed December 12, 2022.
  5. 26 CFR 601.602: Tax forms and instructions. Internal Revenue Service. URL. Accessed December 12, 2022.
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