What to do with HSA after leaving a job

The first option is to essentially do nothing, and let your HSA funds remain in your account. You can then continue to use it for qualified medical expenses. However, it should be noted that you will not be able to contribute to the HSA unless you are enrolled in a qualifying HDHP.

• Roll over the funds into a new HSA

Your next option is to enroll in a new HDHP with your new employer and let the funds from your HSA roll over into your new HSA.

• Roll over funds into an IRA

The third option is for when you don't enroll in a new HDHP, and you also don't plan to use your old HSA funds for medical expenses. In this scenario, you can roll over your old HSA funds into an IRA (Individual Retirement Account)

• Withdraw your HSA funds

Your final option is to withdraw your old HSA funds. You can do this at any time, however, if you are under the age of 65, and you choose to use the withdrawn funds for non-medical expenses, you will then incur a 20% income tax penalty on those funds.

Individuals over the age of 65 can withdraw the funds and use them for non-medical expenses without penalty, but these individuals will still have to pay income tax on the withdrawn funds.