I'm considering a surgery which would be covered by an FSA account. However I have not contributed anything to my FSA account, and it would take two years of max allowed amount ($2,850) to cover the total cost of the surgery. Is the following scenario legal?

I would get a medical loan with 0% interest for two years and get the surgery this year, for the next two years as my payroll has FSA deductions I would pay off the loan with the FSA contributions.

  • How do you have a FSA but not have contributed anything to it? Most people have to pick a set amount per check, with only a few opportunities to change that amount. Did you mean HSA? Commented Apr 11, 2022 at 17:29
  • I don't have a FSA account, I suppose one would be automatically opened through my employer if I contribute to it?
    – Arya
    Commented Apr 11, 2022 at 17:34
  • 2
    They have to be signed up for during open season, or during the initial hiring phase. At the time you start you specify the amount you want to contribute. Open season gives you the opportunity to make adjustments. The money expires at the end of the insurance year, though there is a small amount that can be rolled over. COVID has changed some of the rules. Commented Apr 11, 2022 at 17:39

1 Answer 1


You cannot use the FSA money to pay off a loan, even if the loan proceeds were used to pay medical bills.

From Pub. 502:

What Expenses Can You Include This Year?

You can include only the medical and dental expenses you paid this year

The pub is generally discussing "eligible expenses" for deduction, but you can only use the FSA for the same eligible expenses (i.e.: FSA can only be used on what's deductible on your tax return). See additional details and explanation on the Health.gov website.

  • 1
    Shortly after that quote in Pub 502 it states: "This is not the rule for determining whether an expense can be reimbursed by a flexible spending arrangement (FSA)." I think for FSA what matters is the date of service, not the date of payment...
    – TTT
    Commented Jan 7, 2023 at 6:12

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