Limited use FSA + HSA and spouse non-HSA account

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NorCalHiker
Posts: 144
Joined: Tue Mar 01, 2011 1:39 am

Limited use FSA + HSA and spouse non-HSA account

Post by NorCalHiker »

Current scenario:
- I'm enrolled with our children in my company's HDHP and make the maximum yearly contribution to my HSA from my paycheck.*
- Wife is enrolled with our children in a non-HDHP health plan through her employer
- The entire family is enrolled in my company's dental plan
- It's open enrollment time for me and I can open up a limited use FSA for dental (and vision expenses). My wife has some upcoming dental expenses for next year.
* Probably isn't relevant, but wanted to state it for completeness: Our children are enrolled in my HDHP to get the higher contribution limit for my HSA; we just use my wife's plan for their healthcare needs

This is my understanding:

1. I can open up a limited use FSA and submit claims for dental expenses that my wife incurs even though she is not on my health care plan.
2. My wife's open enrollment is mid next year. She cannot open up a regular FSA for herself since a regular FSA allows medical expenses for a spouse to be claimed but since I have a HDHP, I'm not allowed to have access to a FSA therefore she is ineligible to open one?

Thanks.
TropikThunder
Posts: 3950
Joined: Sun Apr 03, 2016 5:41 pm

Re: Limited use FSA + HSA and spouse non-HSA account

Post by TropikThunder »

NorCalHiker wrote: Tue Oct 29, 2024 11:46 pm 1. I can open up a limited use FSA and submit claims for dental expenses that my wife incurs even though she is not on my health care plan.
Correct. You're allowed to use your spouse’s FSA money, and vice versa.
NorCalHiker wrote: Tue Oct 29, 2024 11:46 pm My wife's open enrollment is mid next year. She cannot open up a regular FSA for herself since a regular FSA allows medical expenses for a spouse to be claimed but since I have a HDHP, I'm not allowed to have access to a FSA therefore she is ineligible to open one?
She’s still allowed to open an FSA, meaning your insurance status doesn’t affect what choices she can make. But if she has a general purpose FSA, then you’re not allowed to make HSA contributions.
volstagg
Posts: 379
Joined: Tue Feb 01, 2022 7:28 am

Re: Limited use FSA + HSA and spouse non-HSA account

Post by volstagg »

TropikThunder wrote: Wed Oct 30, 2024 12:09 am She’s still allowed to open an FSA, meaning your insurance status doesn’t affect what choices she can make. But if she has a general purpose FSA, then you’re not allowed to make HSA contributions.
Unless there was a change in the law that I missed, that is not true. A MFJ couple can not contribute to both a medical FSA AND an HSA in the same year. If OP's spouse contributes to their FSA, he CAN NOT contribute to his HSA.

ETA. Sorry, your wording was confusing on first read, I think we agree, OP and spouse not contribute to both HSA and FSA in the same year. Spouse can open FSA, but then OP looses his HSA contribution option for the entire year.
TropikThunder
Posts: 3950
Joined: Sun Apr 03, 2016 5:41 pm

Re: Limited use FSA + HSA and spouse non-HSA account

Post by TropikThunder »

volstagg wrote: Wed Oct 30, 2024 9:31 am
TropikThunder wrote: Wed Oct 30, 2024 12:09 am She’s still allowed to open an FSA, meaning your insurance status doesn’t affect what choices she can make. But if she has a general purpose FSA, then you’re not allowed to make HSA contributions.
Unless there was a change in the law that I missed, that is not true. A MFJ couple can not contribute to both a medical FSA AND an HSA in the same year. If OP's spouse contributes to their FSA, he CAN NOT contribute to his HSA.

ETA. Sorry, your wording was confusing on first read, I think we agree, OP and spouse not contribute to both HSA and FSA in the same year. Spouse can open FSA, but then OP looses his HSA contribution option for the entire year.
Yeah I think we’re saying the same thing, the ability to make ongoing contributions is the issue.
ScubaHogg
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Joined: Sun Nov 06, 2011 2:02 pm

Re: Limited use FSA + HSA and spouse non-HSA account

Post by ScubaHogg »

I think the OP is referring to a limited FSA, which as I understand can be held, contributed to, and used along side an HSA for specific purposes (vision and dental, along with some medical stuff once you cross some IRS threshold of deductible spending)
“You can have a stable principal value or a stable income stream but not both" | - In Pursuit of the Perfect Portfolio
Topic Author
NorCalHiker
Posts: 144
Joined: Tue Mar 01, 2011 1:39 am

Re: Limited use FSA + HSA and spouse non-HSA account

Post by NorCalHiker »

Thanks for the replies everyone. Yes, I was referring to the Limited FSA.

On a related note, I was talking to a buddy about this today and he didn't realize that his spouse can't have a FSA while he contributed to a HSA. He thinks they did this by accident in 2020. He can't seem to remember if this was the case or not and his wife changed jobs so he has no access to the FSA provider account anymore. I didn't think there was anything in federal taxes about health care FSA contributions. How does he even go about fixing this if he has no idea or documentation that he did?
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