Does eligibility for a FSA preclude you from having an HSA even if you don't participate in your FSA?

Answer 1

As long as you don't have a FSA, you can have and HSA. Also, you can have a HSA and a limited purpose FSA. The limited purpose FSA can be used for things like vision and dental.

Answer 2

Eligibility for an FSA, does not matter. You can have both an FSA and HSA. An HSA is better because at the end of the year, your HSA rolls over into the new year, whereas the FSA is a "use it or lose it" type of account. It's YOUR money, you want it to roll over.

If you already have an FSA, you can roll over whatever funds that are there and put them into your HSA...and, good news, it will not count as a contribution for that year!! It will continue to gain interest tax-free and you can use the funds for ANY qualified medical expense, whether it be dental, medical, vision, whatever the case may be. Check out publication 502 on irs.gov for a list of all qualified med expenses. For more information on HSA's, check out publication 969.

By the way...in order to have an HSA, the following things must apply to you...
1. You must have an HDHP (high deductible health plan)
2. Must be 18 or older
3. No one can claim you as a dependent
4. If any other secondary/family insurance applies to you, it must also be an HDHP.
5. Cannot be enrolled in Medicare A or B.

That's it. If you have any other questions, check out the publications on irs.gov