Have you recently changed employers? Or are you considering making a change? Fortunately, when you participate in a health savings account (HSA) through your employer, your HSA stays with you. There are plenty of myths about HSAs, but today let’s tackle what really happens to your HSA when you change employers. 

You have options

HSA transfer

If your new employer offers an HSA, you can transfer the administration of your account to your new employer’s HSA administrator. If you select this option, your new employer will provide you with a transfer request form that authorizes a new HSA custodian to take over the administration of your account. There are no IRS fees or penalties for this option.

HSA rollover

You can also take a rollover approach, which is a process by which you receive a check for your HSA funds. You have 60 days after receiving these funds to move them into another HSA. But watch out: If you exceed the 60-day window, those funds will be considered a distribution and taxed — and you’ll be assessed a hefty 20% penalty.

Keep the HSA open

Or, you can simply keep the HSA you already have. There are no IRS fees or penalties for doing so. If you do keep your current HSA, you can withdraw funds for eligible expenses at any time. However, you can only contribute to your HSA if you’re still enrolled in a high-deductible health plan. You can also invest some or all of the funds!

Your HSA is your account

The bottom line is that your HSA is yours. This account doesn’t belong to your employer, so you get to take it with you wherever you go, even if your new employer doesn’t offer HSAs or provide HSA contributions. 

The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own legal counsel, tax and investment advisers. 

Source: Wex, Inc.