What Happens to HSA at the End of the Year?

Many individuals who have a Health Savings Account (HSA) wonder what happens to it at the end of the year. An HSA is a tax-advantaged savings account that is used in conjunction with a high-deductible health plan (HDHP). It allows you to save money for qualified medical expenses on a tax-free basis. Here is what happens to your HSA at the end of the year:

1. Roll Over: The great thing about HSAs is that the funds roll over from year to year. Unlike Flexible Spending Accounts (FSAs), there is no 'use it or lose it' rule with HSAs. This means that any remaining balance in your HSA at the end of the year stays in the account.
2. Accrue Interest: The money in your HSA can earn interest or be invested, depending on the options provided by your HSA provider. This allows your HSA balance to grow over time, providing you with even more funds for future medical expenses.
3. Portability: Your HSA is portable, meaning that it belongs to you and not your employer. If you change jobs or health plans, your HSA stays with you, giving you continued access to the funds.

As the year comes to a close, many individuals with a Health Savings Account (HSA) often ask themselves what happens to their hard-earned savings. Thankfully, HSAs offer a lot of benefits that allow you to take control of your healthcare finances.

1. Roll Over: One of the best aspects of HSAs is that your unused funds automatically roll over from year to year, meaning there’s no pressure to spend your money by the end of the year. You won’t lose any of your savings, making it a smart way to plan for future healthcare costs.
2. Accrue Interest: Your HSA isn’t just a place to store money; it’s also an investment opportunity. Depending on your HSA provider, you can earn interest or invest your funds, allowing your balance to grow over time. This means your HSA can truly work for you, providing you with more resources for any medical expenses that may arise in the future.
3. Portability: One of the significant advantages of an HSA is that it’s yours, no matter where you go. If you switch jobs or insurance plans, your HSA stays with you. This feature ensures you always have access to your funds, allowing you to manage your healthcare expenses without disruption.