Top 20 HSA Questions

In simple terms, a Health Savings Account (HSA) is like a “health 401(k)” you can dip into now—or let it build to pay for qualified health expenses after your retire.  An HSA is a personal bank account; and, like a 401(k), the money is yours to keep even if you change employers (or insurers). 

1. What happens to my HSA if I change plans next year?

If you move off your HSA-eligible plan in the future, you can still spend your HSA funds on qualified expenses—you just can’t contribute to your HSA.

2. What happens to my HSA when I leave my job?

It’s your money! You own the account, so you take it with you. However, if your employer is paying the HSA administrator fees, you’ll need to pay them after you separate.

3. Can I have an HSA and FSA in the same year?

This one deserves a longer explanation.

4. What are the eligibility rules?

HSA eligibility is determined on the 1st of each month. To enroll in (and contribute funds into) a Health Savings Account (HSA), an individual must:

  • Be covered by a HSA-eligible High Deductible Health Plan (HDHP).
    For 2022 and 2021: $1,400 individual/$2,800 family minimum deductible
  • Not be covered by any other health coverage (only the HDHP) 
  • Not be enrolled in Medicare (see Medicare and HSAs)
  • Not be eligible to be claimed as a dependent on another person's tax return (even if that person doesn't claim you as a dependent)

5. Can I pay for my family’s expenses?

Yes! In addition to your spouse, you can spend your HSA dollars on your children or any other dependents you can claim on your federal tax return. You can pay for spousal and dependent expenses even if they are not covered on your health plan. 

While the Affordable Care Act allows you to cover a child on your health plan until they turn age 26—this isn’t the same as being a tax dependent. However, if they are not a tax dependent, but otherwise meet HSA eligibility requirements, they can open their own HSA (i.e. through a financial institution).

6. Can I spend my HSA funds on my domestic partner?

No, not unless the domestic partner is claimed as your federal tax dependent. However, if they otherwise meet HSA eligibility requirements, your partner can open their own HSA (through their banking institution) and have individual HSA contribution limits. 

The HSA store has a helpful write up: Can you use an HSA for a domestic partner?

7. Is there a minimum amount I must contribute?

No. There’s no minimum amount to contribute, but there is a maximum. View HSA Contribution Limits.

8. When do my employer contributions kick in?

This is at your employer’s discretion. Typically, contributions are deposited throughout the year (i.e. per paycheck/once a month). 

9. Is the total contribution I elected available at the start of the year?

No, unlike a Flexible Spending Account (FSA), the funds you elect during open enrollment become available as they are deducted from payroll.

10. Can I change my contribution amount anytime during the year?

This is at your employer's discretion. 

11. Do I have to be eligible for the entire year to max out my HSA? 

If your company has an off-cycle plan year (meaning it doesn't align with the calendar year), the IRS has what’s called the “Last-month rule”: 

If you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers), you are considered to be an eligible individual for the entire year. See IRS Form 8889 Instructions - Health Savings Accounts (HSA)

12. What if I use funds on a non-qualified expense?

Any part of a distribution not used to pay for qualified medical expenses becomes taxable and is subject to an additional 20% penalty unless an exception applies. (Consult your tax professional).

The good news is, at age 65, you can take the distribution as income without a 20% penalty. 

13. How does an HSA affect my income taxes?

  • You are eligible for a tax deduction for contributions you made to your HSA even if you do not itemize your deductions on Schedule A (Form 1040). 
  • Contributions to made to your HSA by your employer may be excluded from your gross income. The contributions remain in your account until you use them. 
  • The interest earned on the account is tax-free.
  • See IRS Publication 969

14. What about state income taxes?

While funds used on qualified expenses are never federally taxed, state taxes may apply (i.e. CA and NJ). Consult your tax professional.

15. What if I exceed the annual HSA contribution limit?

Excess funds are taxable income.

16. If I don’t have funds available, can I reimburse myself later?

Yes. There’s no time limit on when you can reimburse yourself.  As long as you had an HSA when you incurred the qualified medical expense, you can reimburse yourself at any time.  It makes no difference how much time has passed. 

Reimbursement is typically as easy as an ATM transfer. Consult your HSA Administrator.

17. Do I need to submit my receipts with my income taxes?

No. But keep your receipts with your tax records, in case of an IRS audit. See HSA Receipt Documentation

(By the way, an Explanation of Benefits (EOB) you receive from your carrier can be used as a receipt).

18. Does my HSA align with my plan year?

HSAs always align to the calendar year. But your company's plan year is based on their annual renewal date, which may or may not align to the calendar year.

FYI: Dependent Care Flexible Spending Accounts (DCFSAs) also always align to the calendar year.

19. Can I have more than one HSA?

Well, yes. But you should consider consolidating and rolling it over to your employer’s HSA administrator. It’s easier to manage one account (to ensure you don’t exceed the annual limit). Plus, most employers pay the monthly service fees for their administrator.

20. I got an unexpected check from my HSA administrator, should I cash it?


The most likely reason this happened? The US Patriot Act of 2003. Financial institutions must verify the identity of individuals doing business with them and adhere to a Customer Identification Program (CIP). As part of the CIP process, a financial institution must conduct random checks to remain in compliance with the US Patriot Act.

Promptly contact your administrator to resolve your account issue. Generally, you have 60 days after receiving a distribution check to rollover funds back into an HSA.

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