What Happens When You No Longer Qualify for an HSA?

Health Savings Accounts (HSAs) are a great tool for saving money on healthcare expenses while enjoying tax benefits. However, it's important to understand what happens if you no longer qualify for an HSA.

When you no longer qualify for an HSA, the following may occur:

• You can no longer make contributions to your HSA, but you can still use the existing funds for eligible expenses.
• If you no longer have an HSA-eligible high deductible health plan (HDHP), you cannot open a new HSA account.
• You may have to pay taxes and penalties on any non-qualified withdrawals from your HSA.
• Your HSA funds will remain available for eligible healthcare expenses, and you can continue to use them tax-free.

It's essential to be aware of your HSA status and take appropriate steps if you no longer qualify to avoid any financial consequences.

When your eligibility for a Health Savings Account (HSA) changes, it can feel daunting. You may worry about the potential impacts on your healthcare expenses. Remember, while you cannot contribute any further to your HSA, you still have access to the funds already accumulated for qualified medical costs. Understanding this aspect is crucial to managing your healthcare expenses effectively.