HSA/High Deductible Health Plan Question

[doni49]

I have a decision to make and need some advice/info. I have the opportunity to switch to an HSA/High Deductible Health Plan.

But I'm also actively searching for a new job. What happens to the money that's in my HSA if/when I get a new job that does NOT include the HSA/High Deductible Health Plan option? It is my understanding that all funds in an HSA must be used exclusively for medical expenses incurred while I'm on the HSA/High Deductible Health Plan.

If I go to the doctor under the new plan and pay a co-pay, can I use the HSA funds without penalty? At that time, I would have different coverage.

TIA!

[AngelinaCat]

Yes, you can use the HSA to pay your co-pays. That is completely acceptable. What ISN'T acceptable, is to pay your insurance premiums with those funds. Are you able to carry this HSA and insurance with you if you do get the new job?

[Flamingo]

This is an HR question as all plans are different. What you need to do before you consider going into this plan in your present job is to thoroughly read the information as to the plan and how your contributions are handled and what would happen if you leave your job. When you leave your job, you leave that employer sponsored plan. Therefore, you either forfeit the money withheld from your paycheck and that is held in your HRA or you use it. It is important you find this information for that specific plan before you make any decisions. If you are seroiusly considering changing jobs, I would not switch plans at this time but wait until you see what is available with your new job.

[doni49]

Are you able to carry this HSA and insurance with you if you do get the new job?

No. That's why I'm concerned. When I quit the current job, my curret insurance is gone. But I'd still have funds in the HSA.

[mountanddo]

An HSA is different than an HRA where as you contribute your own pretax money to an HSA and your employer may contribute. Only an employer may contribute to an HRA. It is my understanding that you may continue to use the funds in your HSA if you are no longer on a qualifying health plan. You just can't contribute additional dollars or use the funds to pay for health care premiums. You may even use your HSA funds to pay for expenses related to spouse or child health costs even if they are not on your health plan. You are allowed to retain ownership of your HSA even if you leave employment. You are also able to withdraw funds from your HSA without showing that they are actual medical costs unlike a FSA. You will pay a 20% penalty if you use HSA funds for non medical expenses and will need to claim that on your taxes as income. Be sure to check with your HR department as different states may have different rules regarding HSA's.

One thing I read that I wasn't aware of is that the FSA limit beginning in 2012 will be $2,500. This is disapointing as my company currently allows you a maximum of $5,000. This limit will not apply to HSA's. Am I reading this correctly?

[doni49]

Our HR rep said the federal gov't changed the limit on what you can contribute to the UNREIMBURSED MEDICAL EXPENSE portion of a Flexible Spending Account. The limit went from 5000 to 2500. The limit on the childcare portion remains unchanged at 5000. The employer has nothing to do with this limit.

[AngelinaCat]

We have a personal HSA. We fund it every year since 2010 with a Retirement instrument that pays a yearly stipend each January. We are able to put $4500.00 into it each year. So far, it has done us very well.

Check with your HR person and a Financial Advisor and see if there is any way you can transfer or roll over your HSA funds into another instrument.

I need to add that we created my HSA account BEFORE I bought the high deductible insurance, the premium, of which will be going up by nearly 40 dollars in a couple of months...*Sigh*