What to Do with HSA After Leaving Company?

Leaving a company can bring about various changes, including what to do with your Health Savings Account (HSA). An HSA is a tax-advantaged account that allows individuals to save for medical expenses. Here are some steps to consider regarding your HSA after leaving a company:

1. Understand your options: When you leave a company, you have several options for your HSA:

• Keep the HSA: You can leave your funds in the account and continue to use them for eligible medical expenses.
• Transfer the HSA: You can transfer your HSA to a new employer's plan or to a different HSA provider.
• Convert to an individual HSA: If you are no longer covered by a high-deductible health plan, you can convert your HSA into an individual account.

2. Avoid penalties: Be aware of potential penalties that may apply if you don't handle your HSA correctly after leaving a company:

• Use funds for eligible expenses: Make sure to use the funds in your HSA for qualified medical expenses to avoid tax penalties.
• Avoid non-qualified expenses: Using HSA funds for non-qualified expenses may result in tax liabilities and penalties.

3. Plan for the future: Consider your healthcare needs and financial goals when deciding what to do with your HSA:

• Review your new healthcare coverage: Understand how your new healthcare plan may impact your eligibility to contribute to an HSA.
• Save for retirement healthcare expenses: HSA funds can be used for qualified medical expenses in retirement, making it a valuable savings tool.

Leaving a company can be a time of transition, but managing your HSA effectively can help you continue to benefit from its tax advantages and savings potential.

After leaving a company, managing your Health Savings Account (HSA) effectively is key. You can keep your HSA intact, allowing you to use it for eligible medical expenses even if you’re no longer employed there.