Do Health Savings Accounts Expire After a Certain Period

Health Savings Accounts (HSAs) can be a great way to save for medical expenses, but it's natural to wonder if they expire after a certain period. In fact, HSAs have a unique rule regarding their expiration.

HSAs are tied to a high-deductible health plan (HDHP), and as long as you're enrolled in an HDHP, your HSA won't expire. This means you can keep your HSA even if you switch jobs or insurance plans.

One key thing to note is that HSAs are portable, meaning you can take them with you if you switch jobs or retire. This is a big advantage over other types of savings accounts.

To contribute to your Health Savings Account (HSA), you should consider your past medical expenses and estimate your future needs.

Look back at how much you've spent on medical expenses in past years to get an idea of what you'll spend in the coming year, including dental and vision care.

You can set aside as much as your budget allows, as long as you stay under the IRS limits.

Remember, HSA funds don't expire - they stay with you until you spend them.

An HSA, or Health Savings Account, is a type of savings account that allows you to set aside money for medical expenses on a tax-free basis.

HSAs are designed for people with high-deductible health plans, which have lower premiums but higher out-of-pocket costs.

You can only contribute to an HSA if you have a high-deductible health plan, which is typically defined as a plan with a deductible of at least $1,400 for individual coverage or $2,800 for family coverage.

The funds in an HSA are yours to keep, even if you change jobs or retire, and you can use them for qualified medical expenses at any time.

HSAs are portable, meaning you can take them with you if you switch jobs or retire, giving you control over your healthcare expenses.

You can use HSA funds to pay for a wide range of qualified medical expenses, including doctor visits, prescriptions, and even some over-the-counter medications.

Some common qualified medical expenses include copays, coinsurance, and deductibles, which are all costs associated with medical care.

HSAs are triple-tax-advantaged, meaning your contributions are tax-deductible, the funds grow tax-free, and withdrawals for qualified medical expenses are tax-free.

You can use HSA funds to pay for medical expenses for yourself, your spouse, and your dependents, making it a great option for families.

An HSA compatible plan can be more affordable than traditional options, with higher deductibles and utilization of copays and coinsurance after the deductible has been met.

The tax benefits of using pre-tax money to fund an HSA are incredibly beneficial, allowing members to lower their taxable income and reduce tax liability.

Members can contribute pre-tax money to fund their HSA, which can help reduce tax liability.

Using tax-free HSA money to pay for health-related costs is a huge advantage, as it's not subject to taxes.

With an HSA, you can save for medical expenses in a tax-advantaged way, which can be a huge relief for those with ongoing health needs.

The IRS sets annual limits on how much you can contribute to an HSA. These limits can change each year.

You can contribute up to $4,300 to an HSA for individual coverage in 2025, and up to $8,550 for family coverage. If you're 55 or older, you can also make an extra $1,000 "catch up" contribution each year.

Contribution limits include money from all sources, like you and your employer, and across all your HSAs. You can find more details on the IRS website.

To decide how much to contribute, look back at your past medical expenses and estimate your future needs. You can also consider any upcoming medical events, like a baby or surgery.

HSA funds don't expire, so you can set aside as much as your budget allows, as long as you stay under the IRS limits.

Here are the 2025 HSA contribution limits:

You can also refer to the 2023 limits for comparison:

You can deposit your own after-tax money to your HSA, either all at once or through regular automatic deposits, and these deposits are deductible when you file your taxes every year.

These deposits can be a great way to boost your HSA balance, especially if you're not getting any employer contributions or matching funds.

You can deposit as much as your budget allows, as long as you stay under the IRS limits.

Since HSA funds roll over year to year, you don't have to worry about using them up by a certain deadline.

You can set aside money for dental and vision care, as well as medical expenses, and use it all in the future if you need to.

Take some time to look back at your past medical expenses to get an estimate of what you'll spend in the coming year, and factor in any upcoming events like surgeries or births that might affect your healthcare costs.

You can use your HSA funds in two main ways: with a debit card or through reimbursement. Your HSA may come with a special debit card that takes the money directly from the account, making it easy to use for eligible items and services.

You can also use a reimbursement, which takes a few extra steps but can act as a good backup in case you forget, can't use, or don't have an HSA debit card. Just pay for your HSA eligible expenses and save the receipt.

HSA funds roll over year to year, so you don't have to worry about using them before they expire. In fact, there's no limit to the amount of funds you can roll over from year to year.

Using your HSA funds can be a great way to save for medical expenses, and you can even use them for non-medical expenses after age 65 without the 20% IRS penalty. This means your HSA can become a traditional IRA, providing an additional way to save for retirement.

You can deposit your own after-tax money to your HSA, either all at once or through regular automatic deposits. These deposits are deductible when you file your taxes every year, providing another tax benefit of having an HSA.

Losing your high-deductible health plan (HDHP) means you can't contribute to your HSA.

You can still withdraw tax-free, penalty-free funds from your HSA to pay for qualified medical expenses, regardless of your health insurance status.

If you regain HDHP coverage, you can resume making contributions to your HSA.

However, if you end up getting HDHP coverage again before the end of the year, you must keep your HDHP coverage in place throughout the next year to avoid paying taxes and a penalty on some of the HSA contributions you made during the year.

Losing your high-deductible health plan can mean you can't contribute to your HSA, but you can still withdraw tax-free, penalty-free funds for qualified medical expenses.

If you switch to a different type of health insurance or end up uninsured, you can't contribute to your HSA during that time, but you can still make tax-free withdrawals for medical expenses.

You can resume making contributions to your HSA if you get an HDHP from a new employer or purchase one on your own through the Marketplace or exchange.

You can contribute the full allowable amount to your HSA for the year if you have HDHP coverage as of December 1, but you'll have to keep your HDHP coverage in place throughout the next year or face taxes and penalties.

The maximum allowable HSA contribution amount in 2024 is $4,150 if you have coverage for just yourself under the HDHP, or $8,300 if you have coverage for yourself and at least one other family member.

You can withdraw money from your HSA for any reason without a 20% penalty once you turn 65, but only qualified medical expenses will be tax-free.

Medicare premiums, such as Part B, Part D, and Medicare Advantage, are considered qualified medical expenses, but Medigap premiums are not.

You can use your HSA funds to cover medical expenses for your spouse, but you can only use your pre-tax HSA funds to cover your spouse's Medicare premiums if you and your spouse are at least 65 years old.

You'll need to stop contributing to your HSA once you've enrolled in Medicare, even if you're only enrolling in Medicare Part A and delaying Medicare Part B because you're still working.

If you're losing your job and need to pay COBRA premiums, you can use money from your Health Savings Account (HSA) to cover the costs.

You won't have to pay income taxes on HSA withdrawals for COBRA premiums, and you won't face the 20% penalty that applies to non-qualified HSA withdrawals.

As long as you're receiving federal or state unemployment benefits, you can withdraw money from your HSA to pay health insurance premiums, even if you're not eligible for COBRA.

You can use HSA funds to purchase a health plan from your state's Affordable Care Act health insurance exchange and pay the premiums with pre-tax dollars.

If you're receiving unemployment benefits, you may even be eligible for a government subsidy to help you pay the monthly premiums, making your HSA funds stretch further.

Once you stop receiving unemployment benefits, you'll need to stop using your HSA funds to pay your health insurance premiums to avoid a 20% penalty on those withdrawals.