FSA and HSA: Can You Have Both at the Same Time?

During enrollment season, people often ask, “Can I have an FSA and HSA at the same time?” Both consumer-directed healthcare benefit accounts are popular, because people want to maximize their tax savings and lower healthcare costs. Let’s take a look at both accounts and see if you can have an FSA and an HSA at the same time.

FSA and HSA: A Quick Comparison

Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) are similar, but they also have some significant differences.

First, let’s look at the similarities. Each pay period, the participant (employee) has an FSA or HSA contribution deducted from their paycheck before taxes are withheld. Another similarity is eligible expenses – you can use each account for most of the same qualified healthcare-related expenses (with a few differences).

Now, to cover how they differ. Each account has unique eligibility requirements. With an FSA, there is no health plan requirement to sign up. You can enroll whether or not you have a health insurance plan. To open and contribute to an HSA, however, you must be enrolled in a high deductible health plan (HDHP).

Account ownership is a significant distinction between an FSA and an HSA. FSAs are employer-owned, meaning the account stays behind if you leave your employer. With an HSA, you own the account, which is yours for life; you can continue making contributions and spending the available balance, regardless of your employment status.

You may have heard the term “use it or lose it.” FSAs and HSAs have different rules for what happens with the unused balance at the end of the year. If you own an HSA, all unused funds roll over to the next year. With an FSA, you may have “use it or lose it,” carryover, or a grace period. Carryover allows unused funds up to a maximum amount to carry over to the following year, while a grace period extends the timeframe you have to use up unspent dollars (typically 2.5 months after the plan year ends).

The spending ability between each account also has some differences. With an HSA, you can only spend the balance that is currently available in the account. However, FSAs have a special provision called the Universal Coverage Rule. Under this FSA rule, you can spend your entire annual election on the first day of the plan year, even if the contributions have not accumulated. Your available balance will become zero, but you will continue making payday contributions throughout the year.

How you can have an FSA and HSA at the same time

Back to the original question – can you have an FSA and HSA at the same time? Generally speaking, you cannot have a health FSA and HSA simultaneously. However, there are a couple of exceptions: limited-purpose FSAs and dependent care FSAs.

What is a limited purpose FSA (LPFSA)?

An LPFSA covers “limited” eligible expenses such as out-of-pocket dental and vision items, services, and procedures. If you’re enrolled in an HSA, you can have an LPFSA too. These are sometimes referred to as an “HSA-compatible FSA”.

Like a health FSA, the maximum annual contribution amount is the same for an LPFSA. Depending on the employer’s plan, LPFSAs may also have the maximum Carryover.

LPFSA Eligible Expenses

What can you use your LPFSA for?

Refer to IRS publication 502 for a full list of eligible vision and dental expenses.

Can you claim the same expense through your HSA and LPFSA?

No. You cannot claim the same expense through both accounts. This is called “double-dipping.” If you are reimbursed from your LPFSA, you cannot file a claim from your HSA (and vice-versa).

Here’s a pro tip: exhaust your LPFSA funds first, before using your HSA. You can roll over all unused HSA funds, whereas the LPFSA may only allow a carryover of up to $660 (for 2025). Any remaining LPFSA balance would be lost if you don’t spend it.

Dependent Care FSA

The other type of FSA you can have with an HSA is a dependent care FSA (DCFSA), also known as a Dependent Care Assistance Plan (DCAP).

A dependent care FSA can be used to pay for the cost of care for dependents under age 13. You can also pay for care for older dependents who cannot look after themselves while you’re at work or school (such as an elderly parent or a child with disabilities).

Eligible employees can have a DCFSA/DCAP account through their employer’s benefit plan. The maximum annual contribution limit for a DCAP is $5,000.

Dependent Care FSA Eligible Expenses

• Adult care
• Before and after-school care
• Day camps (overnight camps do not qualify)
• Daycare, preschool, and pre-kindergarten (including deposits for daycare)
• Elderly care
• Sick child care

Filing a claim

If you have the same type of claim each month or week, you can submit a recurring expense form for daycare and other recurring expenses. Download the Beneliance form here.

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Beneliance has provided Arkansas employers with comprehensive third-party employee benefits administration and compliance services since 1996. Please enter your email (above right) to receive notifications about new blog articles as they are published.