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A long time ago, I opened an HSA account.

Now my employer is offering me an FSA account. So long as I don't contribute to the HSA account, can I keep it for later and only contribute to the FSA account?

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Participation in the FSA will make you ineligible to contribute new money to the HSA. However, the money that you already have in the HSA is yours to keep until you use it. There is no time limit for using that money.

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First, your HSA is yours to keep and spend on medical expenses, whether you are eligible to contribute to it or not. Period.

If you have a high-deductible medical plan, you should be eligible to contribute to an HSA, so you should do that instead of opening an FSA. I am not aware of any advantage of an FSA over an HSA. An FSA is use-or-lose (recent changes allow you to carry over a portion of it I believe, but not all), an HSA is your money to keep. So an HSA is better than an FSA.

If you already can't contribute to an HSA because you are on a PPO or HMO or etc, then an FSA is certainly a valid option for paying for medical expenses with pre-tax dollars. Just make sure you understand how it works, especially since all but a set amount of the money you contribute is use-or-lose.

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  • There are some advantages to an FSA over an HSA. With an FSA, your entire total for the year is available on January 1st, whereas with an FSA you only have available what you put into it. Further, you are not reliable for any overage you have spent if you leave your job. Example, you elect to put $2400 into your FSA ($120 would be deducted from your paycheck twice a month). On Jan 5th, you go to the emergency room and spend all $2400. Three weeks later you quit your job for a new job. You would have only put $120 into it and the remaining $2280 would be, essentially, free money – Kevin Mar 2 at 15:48
  • Good to know, thanks for the info. – forgivenson Mar 2 at 15:54
  • There are (were? It's been >3 years since I had an HDHP) restrictions about what expenses can be charged to which account if you have both FSA and HSA accounts active at the same time. It was easy enough to screw up and the IRS penalties severe enough that when I worked for a company that offered and HDHP they explicitly refused to let anyone have both types of spending account active. – Dan Is Fiddling By Firelight Mar 2 at 21:10

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