What Happens to the Money in My HSA When I Quit? - Exploring the Options

When you quit a job, you may wonder about the fate of the money in your Health Savings Account (HSA). Let's delve into the various scenarios:

If you've switched jobs or left the workforce, your HSA is still yours to keep. You can continue using the funds for eligible medical expenses, even if you're no longer enrolled in a high-deductible health plan (HDHP).

Here's what happens to the money in your HSA when you quit:

• Portability: The HSA account is portable, meaning it stays with you regardless of job changes.
• Option to Withdraw: You can withdraw the funds without penalty for eligible medical expenses.
• Investment Options: Some HSAs offer investment opportunities to grow your funds.

If you choose to use the HSA for non-medical expenses before turning 65, the withdrawal will be subject to income tax plus a 20% penalty. However, after turning 65, you can withdraw funds for any purpose penalty-free (though regular income tax may still apply).

It's essential to understand your HSA options when leaving a job to make informed decisions about your healthcare savings.

When you decide to leave your job, one of your first thoughts might be about your Health Savings Account (HSA) balances. The great news is that your HSA is not just linked to your employer; it's entirely yours. Therefore, you can continue utilizing your HSA funds for qualifying medical expenses even if you move on to a new job or take a break from employment.