Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

HSA-FSA Overlap

Jill_Duncan
Level 2

Client has a HSA and wife an FSA.  Has only had since the spring.  Since they can't have each, if wife's FSA balance is zero when policy ends, are the HSA contributions made by the husband still allowable?

0 Cheers

This discussion has been locked. No new contributions can be made. You may start a new discussion here

1 Solution

Accepted Solutions
Bsch4477
Level 3
Level 3

Standard Health Care Flexible Spending Accounts (HCFSAs) which may reimburse medical expenses are disqualifying coverage for both an individual as well as their spouse for purposes of the tax benefits of  a health savings account (HSA). Employees wishing to open and contribute to an HSA (or have employer contributions into their HSA) would not be eligible if their spouse has a HCFSA (unless the FSA is a limited purpose HCFSA with reimbursements restricted to dental and vision expenses).

View solution in original post

4 Comments 4
Terry53029
Level 14
Level 14

I think your client must wait to fund his HSA until wife's FSA is terminated. Even if her FSA has a zero balance, the plan is still open, and as you said you can't have both 

Jill_Duncan
Level 2

So would he need to return the contributions made to his HSA already? Or could she return hers?

0 Cheers
Terry53029
Level 14
Level 14

If your client funded an HSA while his wife had an open FSA then you need to remove funds including any interest or pay a 6% excise tax. Your client cannot open an HSA while his wife's FSA is open, even if it doesn't have funds. There is a way for his wife to have a limited FSA, and your client to have a HSA, but I am not familiar with the rules. Maybe someone who is will jump in.

Bsch4477
Level 3
Level 3

Standard Health Care Flexible Spending Accounts (HCFSAs) which may reimburse medical expenses are disqualifying coverage for both an individual as well as their spouse for purposes of the tax benefits of  a health savings account (HSA). Employees wishing to open and contribute to an HSA (or have employer contributions into their HSA) would not be eligible if their spouse has a HCFSA (unless the FSA is a limited purpose HCFSA with reimbursements restricted to dental and vision expenses).