Hi,
My wife's FSA account can carry over $500 unused balance to the next year and we expect to have that amount left for the current year. She is relative healthy, so we are planning to have her on a HDHP starting next year to take advantage of the tax benefits of HSA. In this case, can she still keep the FSA $500 rollover amount and contribute to HSA next year? I read some of the online articles, they mention about using limited FSA or post deductible FSA. How in practice can we do that? Are limited FSA or post deductible FSA need to be offered by her employer?
Is it my understanding right that you can have HSA accounts with different brokers? We like to consolidate most of our financials with one broker if possible, but not sure if her company has any affiliated one or not for HSA.
How to contribute HSA with carry over of FSA?
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- Posts: 22
- Joined: Fri Jul 14, 2017 12:32 pm
Re: How to contribute HSA with carry over of FSA?
As far as I'm aware, the rollover shouldn't affect eligibility for the HSA next year. Maybe find some way to spend it just in case (For instance, I wear glasses and contacts, so I can always drop a few hundred on eyewear)
Re: How to contribute HSA with carry over of FSA?
If you have an FSA, except for a limited purpose FSA then you are not eligible for an HSA. FSA's are offered thru employers, HSA's can be outside of employers. It sounds like she needs to completely empty the FSA or will become HSA ineligible.
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- Posts: 22
- Joined: Fri Jul 14, 2017 12:32 pm
Re: How to contribute HSA with carry over of FSA?
Thank you all for the reply, it turns out that her company does offer limited FSA along with HSA.
Re: How to contribute HSA with carry over of FSA?
That doesn't help you this year for the existing general purpose FSA. If you spend it down to zero by the end of the year, you don't have an issue. If it carries into the grace period next year, you can't contribute to an HSA until after the grace period expires. However, under the last month rule, you can still make a full year's contribution to the HSA. You would just be restricted in the timing of when you can begin contributing.