Asked anonymously

If you have an Health Spending Account health insurance plan through your employer, if you leave that employer, can you continue to fund the HSA?

...to the maximum amount allowable to the IRS for that year? Or do you have to fund up the max before leaving your company? Can you send HSA a check to bypass sudden increase in payroll deduction which would raise questions?

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  Answers  |  1

February 15, 2016

Hi, Anonymous, your question is a good one. HSAs are pre-tax deductions by your employer, so leaving your employer stops that deduction. However, the account/balance is yours and is portable. Portable to another "qualified" plan. As for you continuing to fund the HSA account out of your own pocket- no can do. Go to IRS.GOV and look up publication 969 for more details.

Good luck!
Darius

Kim Anderson PRO+
Financial Adviser | 11.06.17 @ 19:45

Darius, your answer is partially incorrect "As for you continuing to fund the HSA account out of your own pocket- no can do". If one remains eligible for an HSA, they can continue funding their HSA even after leaving the employer--they do not need to be employed at that employer to fund the HSA at the employer-selected custodian. While funding their HSA through payroll deduction allows the employee to avoid paying social security/medicare and federal taxes on the contribution amount, the taxpayer can fund the account with after tax dollars then turn around and claim that same amount as an adjustment to income on their tax return.

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