What happens to the money in my HSA if I lose or cancel my High Deductible Health Plan (HDHP) coverage?
Once funds are deposited into the HSA, the account can be used to pay for “qualified medical expenses” tax-free, even if you no longer have HDHP coverage or fail to meet the other eligibility requirements. The funds in your account roll over automatically each year, until used. You are no longer eligible to contribute to a HSA for the months that you are not an eligible individual. What happens to unused funds at the end of the year? Any unused funds carry over from year to year. You can save your money for future medical expenses, and as long as you use the money for a qualified medical expense your funds are NEVER taxed. Do I have to keep records of my medical expenses? Yes. You are responsible for providing documentation to the IRS to prove the HSA distributions were used for qualified medical expenses.
Related Questions
- Do I have to be enrolled in a High Deductible Health Plan (HDHP) to contribute into an HSA (Health Savings Account)?
- What happens to the money in my HSA if I lose or cancel my High Deductible Health Plan (HDHP) coverage?
- What Is an HSA Qualified Health Insurance Plan/High Deductible Health Plan (HDHP) ?
