FAQ: Can I carry over HSA money?
Yes, you can carry over (or “roll over”) any dollars remaining in your health savings account (HSA) at the end of the year to the following year.
This is a key benefit of an HSA compared with a flexible spending account (FSA), which is typically a “use it or lose it” annual benefit.
An HSA is a benefit offered by some employers that allows you to set aside pre-tax dollars to pay for eligible health and medical expenses throughout the plan year — including eyeglasses, contact lenses and prescription sunglasses.
Unlike typical FSA funds, your pre-tax HSA contributions automatically roll over from year to year, keeping past investments available to pay for future medical expenses.
There are two types of HSA carryover options:
Standard (in-plan) HSA rollover. Unused funds remaining in your current HSA at the end of the year roll over to the following year automatically. Prior to each plan year, you can choose how much money you want to contribute to your HSA in the upcoming year.
Rollover to a new HSA. You can also carry unused dollars over from your current HSA to a new HSA plan (for example, if you get a new job). To maintain your HSA tax savings and avoid a 20% penalty by the Internal Revenue Service (IRS), only one rollover of this type is allowed per one-year period, which starts the day you initiate the rollover. You then have 60 days to deposit the funds into your new HSA before risking taxation on the funds.
For more information about your health savings plan and how to carry over HSA dollars, consult your HSA plan administrator or your human resources professional at work.
Page published on Monday, September 23, 2019