HSA/FSA Mid-Year Job Change

Hi All,

I am writing for advice regarding FSAs and HSAs. In short, I had a W-2 job from January through July 15 ("Job 1"). At Job 1, I was enrolled in a high deductible health plan ("HDHP") and was thus eligible to contribute to a Health Savings Account ("HSA"). I made $7,000 of contributions to my HSA.

I then started a new W-2 job on July 21 ("Job 2"). At Job 2, I continued my healthcare coverage from Job 1 via COBRA. I did not enroll in a new HSA at Job 2. However, at Job 2, I did (inadvertently) enroll in a Medical FSA and began making contributions to that account via payroll.

It then recently occurred to me that enrolling in the FSA would make me ineligible to have enrolled in / made contributions to my HSA for this calendar year. I spoke to my new benefits plan (Insperity) and they were less than helpful — told me there was nothing I could do (e.g., could not retroactively terminate and refund the FSA contributions).

For what it is worth, even tho I don't think relevant, my wife and I did have a "Qualifying Life Event" in October and had a baby.

Question #1: Is this correct? Does having an FSA at any point of the year prevent having an HSA that same year?

Question #2: What steps, if any, can I take to maintain my HSA for this calendar year and not incur penalties/taxes from the IRS?

Any and all insight and advice is appreciated!