Don’t Leave Your HSA Behind at An Old Job

When you leave a job (whether it was your decision or not), it’s easy to focus only on your final paycheck, rolling over your 401(k), or figuring out unemployment benefits. But one account tends to be forgotten: your Health Savings Account (HSA). 

If you had an HSA with your old employer, don’t leave it behind! That money is still yours; you can take it with you even if you no longer work there. It’s completely different from a Flexible Spending Account (FSA), which you lose if you don’t use the money within the year. That is not the case with an HSA! Since an HSA is a triple tax-advantaged account, it can be your most valuable account for medical expenses in the future. 

So, before you accidentally leave it behind, let’s discuss what happens to an old HSA and what you can do to keep it growing.

What Happens to Your HSA When Leaving a Job?

When you leave your job, your HSA will stay parked in your former employer’s HSA portal until you log in and transfer the money out. As mentioned before, an HSA differs from an FSA because your HSA money is yours forever until it gets spent. However, depending on who your former employer’s HSA provider is, most likely, there are management fees that can eat away at your balance. 

For example, my previous employer utilized an HSA provider called WealthCare, which charged a $10 monthly maintenance fee for managing the account. Yours is probably a similar monthly charge and you definitely don’t want that to continue over a long time since the fees will add up.

What To Do With an Old HSA

There are 3 things you can do to handle an old HSA. 

1. Leave it alone

We don’t recommend this if your provider charges management and/or inactivity fees. 

2. Transfer it to a new HSA provider

Pick a new HSA provider with better investment options and no management fees to transfer into

3. Spend it on qualified medical expenses

We don’t recommend this YET if you can pay out-of-pocket first. We’ll explain more later in the article.

There’s no “deadline” on what to do with your old HSA, so if life gets in the way, you can certainly leave it alone until you have time to think about it, but at least check if there are fees.

How to Transfer or Rollover an Old HSA

An old HSA is simple to transfer, you just need to figure out where you want to transfer it to.

In my case, I wanted to transfer my account into Fidelity, as there are no maintenance fees to worry about. I already had my Roth IRA there, so I could keep tabs on multiple accounts in one place. Plus, I could select the investments I wanted in my HSA rather than choosing from WealthCare’s limited options. 

Here are the steps I took using Fidelity as an example. The steps will be similar for whichever new platform you choose if you go with another company. 

1. Open a new HSA at Fidelity or your chosen platform (look for one with no fees)
2. My old HSA was mostly in Investments so I had to transfer/convert the money into uninvested Cash before I can initiate a rollover between Fidelity and WealthCare.
3. Once your old HSA funds are all in Cash, you can start a transfer on Fidelity or your new platform of choice. You’ll need to start on your new platform to “pull” money from your old HSA.
4. Your new platform will ask for your assets and your old provider will process the request which typically can take up to 5 weeks. Mine took about 3 weeks.
5. Once your funds are in your new HSA, then you can purchase funds to continue growing your HSA investments. We suggest low-cost index funds like VFIAX or FXAIX or low-cost ETFs like VTI or VOO.

How to Avoid a Tax Penalty When Transferring a HSA

When you do a direct rollover or transfer using your new platform of choice’s process (in my case, I used Fidelity’s transfer process), you’ll be able to avoid any tax penalties because you’re directly moving money from the old to the new account.

If you do an indirect rollover, meaning your old HSA provider sends YOU a check or electronic transfer of your funds, then you have 60 days to deposit that money into your new HSA account. When the 60-day window passes, IRS will consider it to be a taxable withdrawal and you can get punished with a 20% penalty and other taxes. 

The taxes will be simple to avoid: just deposit the money within 60 days or do a direct rollover!

Continue Contributing To Your HSA Post-Job

As long as you have a high-deductible health plan (HDHP) you can continue to contribute to your HSA on the new platform. The maximum contribution limit for 2025 is $4,300 for self-only coverage and $8,550 for family coverage. Those age 55+ can contribute an additional $1,000 more for catch-up.

So if you transferred your HSA in the middle of the year, just deduct what you’ve already contributed against the max limit and divide out the funds for the remaining months of the year.

When to Spend Your HSA

Earlier, we mentioned that we don’t recommend spending your HSA on qualified medical expenses YET if you can afford it out-of-pocket now. Because the HSA is triple-tax advantaged, meaning the money is going in tax-free, it’s growing tax-free in investments, and when used for medical expenses later, it’s withdrawn tax-free, it’s beneficial to keep the money growing for as  long as possible. 

In short, pay for any medical stuff out-of-pocket now, but KEEP ALL THE RECEIPTS related to it. In the future, you can reimburse yourself tax-free as long as you have the receipts. A popular method way to keep track is to take pictures of the receipts and keep them in a Google folder as as well keeping a spreadsheet of the costs from doctor visits, eyeglasses, OTC meds, lab visits, and more. If you need a refresher, check out The Beginner’s Guide to HSAs.

The Money Move

Your HSA is one of the most important accounts for your medical needs in the future so don’t leave it behind at your old job! An HSA is sometimes called a “stealth IRA” due to it’s triple-tax advantages and we love it. 

Keep the money in your HSA growing in low-cost investment funds while you pay for current medical expenses out of pocket, and then use the account as a powerful retirement tool later by covering healthcare costs tax-free when you need it most. Taking care of your HSA now will give you a lot more financial flexibility later.