I have a HDHP with an HSA account. My spouse was recently deployed so we are currently not eligible to contribute to my HSA. However, we have a college age daughter who is no longer eligible for military benefits. She is covered under my HDHP and has high cost monthly medication. I want to contribute to a general purpose FSA to help cover my $3000 deductible. Can I have an existing HSA with funds in it and participate in a general purpose Health Care FSA as long as I am not contributing to my HSA at the same time? Also, can I take distributions from both in the same year? We will spend more on health care out of pocket than we can put into the FSA.
The only restriction on using HSA funds to pay for qualified medical expenses for you, your spouse and your dependents is that the expense has to have been incurred after the establishment of the HSA and expenses cannot be reimbursed by some other means. In other words, you can't cover the same portion of an expense twice, once from the FSA and again from the HSA. (Nothing prevents you from paying the expense half from the FSA and half from the HSA, you would just need to keep real good records to show that the expense was not covered twice.)