Can You Still Contribute to HSA When Switching Employers?

One common question that often arises when individuals switch employers is whether they can still contribute to their Health Savings Account (HSA). The good news is that the short answer is yes, you can continue to contribute to your HSA even when changing jobs. However, there are a few things to keep in mind to ensure a smooth transition and maximize the benefits of your HSA.

When switching employers, here are some key points to consider:

• Make sure your new employer offers a High Deductible Health Plan (HDHP) that is HSA-eligible. You can only contribute to an HSA if you are enrolled in an HDHP.
• Check the contribution limits for the year. For 2021, the annual contribution limits are $3,600 for individuals and $7,200 for families. If you are 55 or older, you can contribute an additional $1,000 as a catch-up contribution.
• You can contribute to your HSA through payroll deductions with your new employer. This allows you to make pre-tax contributions, which can lower your taxable income.
• If you have funds remaining in your previous HSA, you can either keep the account open and continue to use the funds for eligible medical expenses, or you can transfer the funds to your new HSA tax-free by doing a trustee-to-trustee transfer.

By understanding the rules and regulations surrounding HSA contributions when switching employers, you can continue to benefit from the tax advantages and savings that an HSA provides. Be sure to communicate with your new HR department and HSA provider to make the process as seamless as possible.

Transitioning to a new employer doesn’t mean you have to leave your Health Savings Account (HSA) behind. In fact, you can continue making contributions as long as you're enrolled in a High Deductible Health Plan (HDHP). It's essential to verify that your new employer offers an HDHP to maintain your HSA contributions.