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Your Internet Resource for HSA Information
Portability
Forget About "Use It Or Lose It"
…
HSAs Are "Use It Or Keep It!"
One of the strategic benefits of a Health Savings
Account is that you own the account. The money is yours to keep,
even if you don't use it all by the end of the year. And if you
change jobs or health insurance coverage, the money goes with you.
You no longer have to worry about using all
your funds for fear of losing them.
The "portability" of HSA accounts is a vast improvement
over the rules that govern Health Reimbursement Arrangements (HRAs)
and Cafeteria Section 125 Flexible Spending Accounts (FSAs), where
any unused funds revert back to the employer at the end of the year
or upon termination. HSA portability affords you more flexibility
when it comes to your healthcare expenditures.
You can take your money with you if you leave
your company.
If you remain covered under a High-Deductible Health Plan (HDHP),
you can continue to access your HSA funds through individual coverage
or you can "roll over" funds from one employer's HSA program
to another employer's program (or from an Archer MSA to an HSA).
Even if your new employer doesn't offer an HSA-compatible HDHP,
you can keep the money in your HSA and continue to use the funds
for qualified expenses. However, you can no longer add money to
the account until you are again covered by an HDHP.
You can use your HSA like an IRA.
Withdrawals for qualified medical expenses can always be made tax-free
(there's a 10% penalty, plus taxes, for non-medical expenditures).
But if you don't use all the money by the end of the year, your
money stays in your account until you need it. One financial benefit
is that any leftover HSA funds earn interest tax-deferred …
all the way into retirement. Then at age 65, you can make withdrawals
from your HSA for any reason without penalty.
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