What Happens When You Switch Out of HSA?

When you switch out of an HSA (Health Savings Account), there are several important factors to consider. Here's what happens:

• Any remaining funds in your HSA can still be used for eligible medical expenses even after switching out of the account.
• If you are no longer eligible to contribute to an HSA, you won't be able to make any more deposits into the account. However, you can still use the existing funds for qualified medical expenses.
• If you switch to a non-HSA-eligible health plan, you may face tax implications, such as being subject to income tax and potential penalties on the funds used for non-qualified expenses.
• It's important to understand the rules and regulations regarding HSAs and transitioning out of them to avoid any unexpected consequences.

Switching out of a Health Savings Account (HSA) can raise various questions and concerns. It's crucial to know that any remaining balance in your HSA is still available for your qualified medical expenses, so don’t worry about losing those funds right away.