HSA vs. Dependent FSA

[Mustache ride]

So I'm in a dilemma, and I'm looking to get opinions on what may be the better option. Currently I have an HSA that I just enrolled in this year and am contributing to. Next year, I will be having my first child and they will be going to daycare. Does it make more sense for both myself and DW to max the Dependent FSA since we will use it all on daycare, or continue to invest in just the HSA. I'm not sure if it's work rules or government, but I am not allowed to have both a HSA and the FSA.

[tawyer]

In short, there are several types of FSA. You are allowed HSA and Dependent Care FSA simultaneously. You are not allowed an HSA with a general purpose health FSA; however, you are allowed a limited purpose FSA (limited to dental and vision expenses). I have navigated all three situations.

To your question, you should max both.

[Mustache ride]

Thanks for the info. I guess I will have to check with my benefits department. They made it a point to say you could not do both during a presentation. Maybe they aren't aware of the rule, or maybe it's a company rule if that can be such a thing.

[La Bibliotecaria Feroz]

Thanks for the info. I guess I will have to check with my benefits department. They made it a point to say you could not do both during a presentation. Maybe they aren't aware of the rule, or maybe it's a company rule if that can be such a thing.

You can't use a HEALTH FSA and an HSA at the same time but DEPENDENT FSA and HSA is probably fine. But yeah, talk to benefits.

Oh, and if you and your wife both have access to a dependent FSA, be aware that you can only max one of them (or put half in each). The contribution limit is per family, not per parent.

[Pylortes]

My family has both an HSA and a dependent care FSA.  Granted the HSA is through my wife's employer (she has a better insurance plan at her employer) and the dependent care FSA is through my employer.  The key as was mentioned above is you can't have a health FSA, but a dependent care FSA is a different thing so allowed with the HSA.  If you are forced to choose between the two it may depend on your income and personal situation but an HSA is hard to beat (especially if you employer helps fund it). I would probably go that direction.