What Happens to Your HSA After You Quit Work?

When you leave your job, you may wonder what happens to your Health Savings Account (HSA). An HSA is a valuable tool for saving and paying for medical expenses with tax advantages. Here's what you need to know about your HSA after quitting work:

If you quit your job, your HSA is yours to keep. It is a portable account that belongs to you, not your employer. Here's what you can do with your HSA after leaving your job:

• You can continue to use the funds in your HSA for qualified medical expenses, tax-free.
• You can keep contributing to your HSA if you have a high-deductible health plan (HDHP) through a new employer or privately.
• If you no longer have an HDHP, you can still use the funds in your HSA for medical expenses, but you cannot make new contributions.
• You can also use the funds in your HSA for non-medical expenses, but these withdrawals are subject to income tax and a 20% penalty if you are under 65 years old.
• You have the option to roll over your HSA funds to another HSA provider without penalty.
• If you turn 65, you can withdraw funds from your HSA for any purpose without penalty, although income tax may still apply if not used for medical expenses.

It's essential to understand your options and obligations concerning your HSA after leaving your job to make informed decisions about managing your healthcare expenses effectively.

When you decide to leave your job, one thing that might be on your mind is what will happen to your Health Savings Account (HSA). The good news is that your HSA is yours—you can take it with you! Here’s a deeper dive into what you can do with your HSA after quitting.