How Much Can I Put in My HSA if I'm Leaving the Company?

One common concern individuals have when leaving a company is regarding their Health Savings Account (HSA) contributions. An HSA is a tax-advantaged savings account available to individuals enrolled in a high-deductible health plan (HDHP), allowing them to save for qualified medical expenses.

When leaving a company, here are some key points to keep in mind about your HSA:

• Contributions made to your HSA belong to you and are portable, meaning they stay with you even if you change jobs or retire.
• You can only contribute to your HSA while you are enrolled in an HDHP. If you switch to a non-HDHP plan, you can no longer make contributions, but you can still use the funds in your HSA for qualified medical expenses.
• Individuals under the age of 55 can contribute up to $3,600 for self-only coverage or $7,200 for family coverage in the tax year 2021. Those aged 55 and older can make an additional catch-up contribution of $1,000.
• If your employer has been contributing to your HSA on your behalf, those contributions cease once you leave the company. You can no longer receive employer contributions, but you can continue to contribute your own funds up to the annual limits.

It's essential to be aware of these guidelines and limitations when managing your HSA, especially when transitioning between employers. Your HSA can serve as a valuable resource for covering medical expenses both now and in the future.

One common concern individuals face when saying goodbye to their employer is understanding the dynamics of their Health Savings Account (HSA) contributions. This tax-advantaged savings account is a helpful tool for those enrolled in a high-deductible health plan (HDHP), enabling them to set aside money for qualifying medical expenses.

As you prepare for your transition, keep in mind these essential aspects regarding your HSA:

• Your HSA contributions are entirely yours and remain with you even as you transition to a new job or enter retirement.
• To continue contributing to your HSA, you must be enrolled in an HDHP. Should you switch to a non-HDHP plan, while you can no longer make contributions, you can still utilize the funds already in your HSA for qualified medical expenses.
• For the tax year 2021, if you are under 55, you can contribute a maximum of $3,600 for individual coverage or $7,200 for family coverage. If you are 55 or older, you are eligible for an additional catch-up contribution of $1,000.
• When you leave your job, any contributions made by your employer to your HSA will stop. However, you can still contribute your own money, within the set annual limits.

Understanding these guidelines can be vital as you navigate the transition phase between employers. Your HSA continues to be a valuable asset, helping you manage your current and future medical expenses efficiently.