What to Do If You Still Have HSA Funds, But Not an HSA Health Plan

If you find yourself in a situation where you still have HSA (Health Savings Account) funds but no longer have an HSA health plan, there are several steps you can take to make the most of your remaining funds.

First and foremost, it's essential to understand that HSA funds belong to you, and they never expire. The money will remain in your HSA account until you decide to use it for qualified medical expenses.

Here are some steps you can take if you no longer have an HSA health plan:

• Keep the HSA funds in your account: You can leave the funds in your HSA account and let them continue to grow tax-free until you are ready to use them for qualified medical expenses.
• Use the funds for qualified medical expenses: Even if you no longer have an HSA-eligible health plan, you can still use the remaining HSA funds to pay for eligible medical expenses. This includes expenses such as doctor's visits, prescription medications, and certain medical supplies.
• Consider opening a new HSA-eligible health plan: If you are eligible to enroll in an HSA-qualified high-deductible health plan (HDHP) in the future, you can keep your HSA funds and use them once you have an HSA-eligible health plan again.
• Save the funds for retirement: Another option is to treat your HSA funds as a retirement account. Once you turn 65, you can withdraw the funds for non-medical expenses without penalty (though regular income tax applies).
• Be mindful of potential fees: Some HSA providers may charge maintenance or account closure fees if you no longer have an HSA-eligible health plan. Be sure to review the terms of your HSA account to understand any applicable fees.

Remember, HSA funds can provide valuable financial flexibility and tax advantages, so it's essential to make informed decisions about how to manage your account when your health plan changes.

Finding yourself with leftover HSA (Health Savings Account) funds after no longer having an HSA-eligible health plan can be puzzling, but it's important to remember that these funds are yours to keep, and they are poised to assist you in the future whenever you are ready to utilize them for qualified medical expenses.