What Do I Do With My HSA If I'm Changing Jobs?

If you're about to leave your current employer—or you've already left—you may be wondering what happens to your Health Savings Account (HSA). The good news is that HSAs are portable, meaning you can take them with you when you change jobs. Below is a guide on your options, along with key considerations and upcoming innovations to make the rollover process even easier.

1. Understand HSA Portability

One of the major perks of an HSA is that it belongs to you, not your employer. Unlike a Flexible Spending Account (FSA), your HSA funds stay with you regardless of your employment status.

• Keep It With Your Current Provider: You can continue using your existing HSA even after you leave your job.

• Transfer or Rollover: If you prefer to consolidate or move your funds, you can perform an HSA transfer to a different financial institution.

For official guidance, consult the IRS's Publication 969, which outlines rules for Health Savings Accounts and other tax-favored health plans.

2. Decide on Your Best Move

Here are your primary options when changing jobs:

1. Leave the HSA Where It Is

• Pros: No additional paperwork, and you can continue using the funds for qualified medical expenses.

• Cons: You may need to pay monthly maintenance fees if your employer was previously covering them.

2. Transfer or Rollover to a New HSA

• Pros: Simplifies account management, especially if your new employer or a preferred financial institution offers better terms or investment options.

• Cons: Requires some paperwork, and you'll need to be mindful of IRS rules around rollovers (such as the once-per-year limit on personal rollovers).

3. Close the Account (Not Recommended)

• Generally not advisable, because you'll lose the tax advantages of an HSA and may incur tax consequences if you cash out.

3. Check Contribution Eligibility

Even though you own the HSA, your ability to contribute further depends on whether you're enrolled in a qualifying High-Deductible Health Plan (HDHP). If your new job offers an HDHP that meets IRS requirements, you can keep contributing. If not, you can still spend or invest the HSA funds, but you can't make new contributions.

For the latest IRS contribution limits and HDHP definitions, see:

• IRS HSA Contribution Limits

• HDHP Criteria in IRS Publication 969

4. Rolling Over Your HSA

To transfer your HSA funds to another provider, you typically have two methods:

1. Trustee-to-Trustee Transfer:

• The new HSA provider coordinates directly with your old provider to move the funds.

• No risk of accidentally triggering taxable events, and no limit on how many trustee-to-trustee transfers you can do.

2. 60-Day Rollover:

• You withdraw the funds from your old HSA and deposit them into your new HSA within 60 days.

• Limited to one such rollover in any 12-month period.

• Missing the 60-day window can result in taxes and penalties.

5. Coming Soon: Easy HSA Rollover with Burst

If the process of transferring or rolling over your HSA feels overwhelming, keep an eye on Burst. They're developing a one-click rollover feature that will simplify moving your funds between accounts. Burst already helps you identify HSA-eligible items as you shop online, and soon they'll make rolling over your old HSA just as seamless.

6. Keep Using Your HSA for Qualified Expenses

Even if you're not contributing new funds, you can continue using your HSA money for:

• Doctor Visits & Prescription Medications

• Eligible Dental & Vision Expenses

• Over-the-Counter (OTC) Items that qualify under IRS guidelines

Always keep documentation for any expenses you plan to pay or reimburse from your HSA. See IRS Publication 502 for more details on qualified medical expenses.

In Summary

Your HSA is yours to keep when you change jobs—so there's no need to worry about losing those funds. Decide whether to keep your current account, transfer to a new provider, or look out for Burst's upcoming one-click rollover feature to simplify the entire process.

If you have specific questions or unusual circumstances, consult a financial advisor, tax professional, or contact your HSA provider directly to ensure you're making the best decision for your situation.