You can have both an HSA and FSA, but only under specific conditions, and the rules depend on which type of FSA you choose
The short answer: yes, but with limits. You can hold an HSA (Health Savings Account) and a Limited-Purpose FSA at the same time. You cannot hold an HSA and a general-purpose FSA together in the same year. The IRS treats them as overlapping accounts, and the rules exist to prevent you from sheltering too much income from taxes in a single year.
If you have a regular FSA through your employer, you must choose: keep the FSA or open an HSA. If you want both accounts, you need to switch to a Limited-Purpose FSA (also called a restricted FSA), which only covers dental and vision expenses. That combination is allowed because the Limited-Purpose FSA does not cover medical expenses, so there is no overlap with what your HSA can pay for.
Key Takeaways
- A Limited-Purpose FSA covers only dental and vision; a general-purpose FSA covers medical, dental, and vision — and you cannot have a general-purpose FSA if you own an HSA.
- If you switch from a general FSA to a Limited-Purpose FSA, you must do it during open enrollment or within 31 days of a may have access to life event (marriage, birth, job change, loss of coverage).
- Money in an FSA does not roll over to the next year; most plans have a use-it-or-lose-it rule, though some allow a $640 carryover (2024 limit, varies by year).
- Your HSA contribution limit is reduced if you have any FSA coverage, even a Limited-Purpose FSA, so coordinate your contributions with your employer's benefits team.
Why the IRS limits HSA and FSA combinations
Both accounts let you set aside pre-tax money for medical costs. The IRS allows this tax break because it encourages people to save for healthcare. But the agency does not want one person to shelter unlimited income from taxes by maxing out both accounts simultaneously.
A general-purpose FSA and an HSA both cover the same expenses: doctor visits, prescriptions, medical equipment. If you could use both at once, you could pay for the same bill twice — once from each account — and avoid taxes on a much larger chunk of income than intended. The Limited-Purpose FSA rule exists to close that loophole: it covers only dental and vision, which an HSA can also cover, but the FSA is restricted to those categories, so there is less room for abuse.
Limited-Purpose FSA: the account type that works with an HSA
A Limited-Purpose FSA (or restricted FSA) covers dental and vision expenses only. Dental includes cleanings, fillings, root canals, and orthodontia. Vision includes eye exams, glasses, and contact lenses. It does not cover general medical expenses like doctor visits or prescription drugs.
If your employer offers a Limited-Purpose FSA option, you can open one while keeping your HSA. You contribute pre-tax money to the FSA, use it for dental and vision bills, and use your HSA for everything else. This combination is common among people who want to maximize tax savings across multiple account types.
Not all employers offer a Limited-Purpose FSA. Ask your benefits team whether it is available during open enrollment. If your employer only offers a general-purpose FSA, you must choose one account or the other.
How to switch from a general FSA to a Limited-Purpose FSA
You can change FSA types only during open enrollment (usually October or November for coverage starting January 1) or within 31 days of a may have access to life event. may have access to events include marriage, divorce, birth or adoption of a child, loss of health coverage, change in employment status, or a significant change in your employer's health plan.
Contact your employer's benefits or human resources department and request the change in writing if possible. Keep a copy of your request. If you are making the change because of a life event, you may need to submit proof — a marriage certificate, birth certificate, or letter from your previous employer, depending on what triggered the change.
The change takes effect on the date your employer processes it, usually the first of the following month. Your old FSA account closes, and any unused balance is forfeited (unless your plan allows a carryover). Your new Limited-Purpose FSA begins, and you can start contributing in the next pay period.
How HSA and Limited-Purpose FSA contributions interact
Your HSA contribution limit is reduced if you have any FSA coverage, even a Limited-Purpose FSA. The IRS counts any FSA — including a Limited-Purpose FSA — as disqualifying coverage for the full HSA limit.
In 2024, the HSA limit for self-only coverage is $4,150. If you have a Limited-Purpose FSA, your HSA limit does not change — you can still contribute the full amount. However, if you have a general-purpose FSA, you cannot open an HSA at all, and if you already have an HSA, you must close it or stop contributing.
Work with your employer's benefits team to coordinate your contributions. They can tell you the exact limits for your plan year and help you decide how much to put into each account. A common strategy is to contribute more to the FSA (since it has a lower limit and you must use it within the year) and use the HSA as a longer-term savings vehicle.
FSA money does not carry over; HSA money does
An FSA has a use-it-or-lose-it rule: money you do not spend by the end of the plan year is forfeited. Some employers allow a carryover of up to $640 (2024 limit; this amount changes yearly), which rolls into the next year. Check your plan documents or ask your benefits team whether your FSA allows a carryover.
An HSA works differently. Money you do not spend stays in the account indefinitely. You can let it grow year after year, invest it, and use it in retirement. This is one reason many people prefer an HSA when they have a choice: the money is truly yours to keep.
If you have both accounts, plan your FSA contributions carefully. Contribute only what you expect to spend on dental and vision in the coming year, because that money will disappear if you do not use it. Use your HSA for expenses you might not incur this year, since the money will still be there next year.
What happens if you violate the rules
If you contribute to both a general-purpose FSA and an HSA in the same year, the IRS may penalize you. You could face a 6% excise tax on the excess contribution, plus income tax on the amount you should not have contributed. The IRS discovers these violations through employer reporting or during a tax audit.
If you realize you made a mistake — for example, you opened an HSA without knowing you had an active general-purpose FSA — contact your HSA provider and your employer immediately. You may be able to withdraw the excess contribution before tax filing and avoid penalties. Do this as soon as you discover the error; waiting until tax time makes it harder to correct.
Frequently Asked Questions
Can I have an HSA and a dental FSA at the same time?
Yes, if the dental FSA is a Limited-Purpose FSA (restricted to dental and vision only). If your employer's FSA covers medical expenses in addition to dental, you cannot have both. Ask your benefits team whether your plan is limited-purpose or general-purpose.
What if my employer only offers a general FSA, not a Limited-Purpose FSA?
You must choose one or the other. If you want an HSA, you cannot use the general FSA. If you want the FSA, you cannot open or contribute to an HSA. You can switch between them only during open enrollment or within 31 days of a may have access to life event.
If I leave my job, what happens to my FSA and HSA?
Your FSA ends when you leave your employer; unused money is forfeited (with rare exceptions for COBRA continuation). Your HSA stays with you. You can roll it to a new HSA provider, keep it where it is, or invest it. The account is yours regardless of employment status.
Can I use my HSA to pay for something my Limited-Purpose FSA does not cover?
Yes. Your HSA covers all medical expenses — doctor visits, prescriptions, medical equipment, and more. Your Limited-Purpose FSA covers only dental and vision. Use the FSA for dental and vision, and the HSA for everything else.
Do I have to contribute the maximum to both accounts?
No. Contribute only what you expect to spend. The FSA has a use-it-or-lose-it rule, so contribute conservatively. The HSA has no deadline, so you can contribute more if you want to build a long-term medical savings cushion.