What Happens to HSA Once You Leave Employer?

When you leave your employer, you may wonder what happens to your Health Savings Account (HSA) and the funds in it. An HSA is a tax-advantaged account that you can use to pay for qualified medical expenses.

Here's what typically happens to your HSA once you leave your employer:

• Ownership: Your HSA is yours to keep, regardless of your employment status. You retain full ownership and control of the account and the funds in it.
• Contributions: While your employer can make contributions to your HSA on your behalf, you can also make contributions on your own. You can continue to contribute to your HSA even after leaving your job.
• Withdrawals: You can still use the funds in your HSA to pay for qualified medical expenses, even if you're no longer employed by the same company.
• Investment Options: Depending on your HSA provider, you may have the option to invest the funds in your HSA for potential growth.
• Portability: You can keep your HSA and continue to use it with a new employer's high-deductible health plan (HDHP), as long as you meet the eligibility requirements.
• Closure: If you choose to close your HSA, you can still withdraw the funds for qualified medical expenses without facing any tax penalties. However, if you use the funds for non-qualified expenses, you may be subject to taxes and penalties.

It's essential to understand the options available to you regarding your HSA when transitioning from one employer to another. By staying informed, you can make the most of your HSA benefits even after leaving your job.

Leaving your employer can be a confusing time, especially when it comes to your Health Savings Account (HSA). Fortunately, your HSA is your financial asset, and it doesn't vanish when you move on to new opportunities.