We have some excellent news for anyone who has a Health Savings Account (HSA) and is curious about what happens to any monies that aren’t used for medical expenses.
The funds in your health savings account (HSA) belong to you, and in contrast to the vast majority of flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs), any unused funds in an HSA roll over into the following calendar year automatically.
Closing And Consolidating Accounts
You can roll over any remaining money and continue to benefit from them, even if you are switching employment or entering a new year. This is something you can do.
Consolidating your HSA accounts is yet another choice you may want to look into, particularly if you have more than one account due to previous employment.
The closing of one HSA account and the transfer of its remaining money to a new HSA, which you will need to request from your plan provider in order to complete the consolidation process.
However, before settling on this option, there are a few other vital considerations to take into account first.
In the first place, you should get aware of the prospective financial repercussions. Some HSA providers may assess costs on a monthly basis for account maintenance, in addition to charges when an account is opened or closed.
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Explore Investment Opportunities With Financial Counselor
In addition, it is recommended to discuss the potential tax implications with a financial counselor before making any decisions.
The process of consolidating accounts is typically tax-free, although this may not always be the case depending on the state in which you live and the specifics of your circumstance.
Keep in mind that HSA funds can be invested in a variety of financial instruments including stocks, bonds, and mutual funds if investing opportunities are something that interests you.