What happens to the money in a health care savings account when you are no longer eligible?
Wayne Smith asked:
I am changing jobs and this employer offers a HSA option that I find attractive. I like the concept but I’m concerned about what happens if I leave that employer down the road and the new employer does not offer a high deductible policy (i.e. I’m no longer eligible for the plan). I could always buy a policy myself above and beyond the HSA amount but I will likely prefer to handle this through my employer. Any info?
Enola Alterio
I am changing jobs and this employer offers a HSA option that I find attractive. I like the concept but I’m concerned about what happens if I leave that employer down the road and the new employer does not offer a high deductible policy (i.e. I’m no longer eligible for the plan). I could always buy a policy myself above and beyond the HSA amount but I will likely prefer to handle this through my employer. Any info?
Enola Alterio
It sits in the HSA. You can still spend it on health care items, you just can’t add to it. (If you just take the money out before 65, it reverts to income and you owe a 10% penalty on it.)