HSA Guide
Can I Take Money Out of My HSA If I No Longer Have a High Deductible Plan?
Published July 21, 2022
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Get the appMany individuals have Health Savings Accounts (HSAs) associated with their high deductible health plans to save and pay for medical expenses tax-free. One frequently asked question is whether it's possible to withdraw money from an HSA if they no longer have a high deductible plan. The answer to this question is outlined below to provide clarity.
Can You Withdraw Money from an HSA If You No Longer Have a High Deductible Plan?
Yes, you can still take money out of your HSA even if you no longer have a high deductible plan. However, there are a few things to consider:
- If you no longer have a high deductible health plan, you can still use the funds in your HSA for qualified medical expenses tax-free.
- If you withdraw the funds for non-qualified expenses when you no longer have a high deductible plan, you will have to pay income tax on the withdrawal plus a 20% penalty if you are under 65 years old. The penalty is waived for individuals over 65, but you still need to pay income tax on the non-qualified withdrawals.
It is essential to understand the implications of withdrawing money from your HSA after changing your health plan status. Be sure to use the funds for eligible medical expenses to avoid additional taxes and penalties.
It's a common situation: you have a Health Savings Account (HSA) paired with a high deductible health plan, but now that you've switched plans, you're wondering if you can still access those hard-earned funds. The good news is, yes, you can withdraw money from your HSA regardless of your current insurance plan.