If you have a HSA you cannot have a medical FSA account, but you can open a “limited purpose medical FSA” to use for dental and vision expenses. Dependent care, parking and transportation flexible spending accounts are still allowed. Consider a limited purpose FSA if you contribute the annual maximum to your HSA. You should consider contributing the maximum allowed to your HSA before contributing to your limited purpose FSA because HSA dollars are not “use it or lose it” like an FSA.
And, you cannot open an HSA if there are funds remaining in your FSA in 2017 as follows:
- For State and Higher Education employees who in 2017 have either a healthcare FSA or limited purpose FSA, they may carry over up to $500 into 2018. Any balances in those accounts greater than $500 on December 31, 2017 will be forfeited. Members can log into the PayFlex website at any time and view their claims, balances, and detailed activity for the flex accounts. Local Education and Local Government plan members who are considering enrolling in a CDHP for 2018 should ensure that they are not enrolled in a healthcare FSA with their employer in 2018 and any healthcare FSA that they have in 2017 has a zero balance by December 31, 2017.
- Plan participants who only have an L-FSA in 2017 (regardless of whether they carry over any funds from 2017 into 2018) may immediately enroll in a CDHP for 2018 if they choose to, and a HSA will be opened for them and available to use on January 1, 2018.
- Participants in a healthcare FSA are not eligible to contribute to an HSA. Therefore, if a 2017 healthcare FSA participant has a carryover amount and wants to participate in an HSA in 2018, they must use all of the funds in their FSA by December 31, 2017 or their HSA will not be opened until April 1, 2018 and any funds contributed to it (employer or employee contributed funds) could only then be used for claims with dates of service of April 1, 2018 or later.