-What needs to happen to my current HSA? (stop contributing, etc).
Yes, stop contributing to your HSA now, on the principle that when you find yourself in a hole, stop digging.
But do NOT yet withdraw any perceived excess contribution for two reasons: (1) many taxpayers find it difficult to calculate the actual excess contributions, and (2) TurboTax is going to tell you the actual excess contribution amount anyway. You will need to determine when the FSA started (was it January 1st? that makes the excess calculation simpler - it would be any contributions in 2025). Then let TurboTax tell you the excess.
-If I stop contributing immediately, can I still use the principle balance of my HSA to pay for health care expenses? Or don't touch it.
Even if you can't contribute to your HSA- you can still spend money out of it for qualified medical expenses - that does not change.
-Is my family forced to start using ONLY the FSA for 2025?
You can take distributions from your HSA for qualified medical expenses even if you have an FSA. HOWEVER, you cannot use FSA funds and HSA funds for the same expense. It's one or the other.
You will have to decide on whether or not your spouse can opt out of the FSA for 2026. I think that if you do some calculations that you will find that if you make the maximum or near maximum HSA contributions, that this is a much better deal than an FSA. So check it out.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
