topic Company merger, move to new HDHP and HSA mid-year. Can I use funds from new HSA acct for exp claimed against the old insurance or should I transfer funds to old HSA? in Deductions & credits

Company merger, move to new HDHP and HSA mid-year. Can I use funds from new HSA acct for exp claimed against the old insurance or should I transfer funds to old HSA?

mikeyjc — Wed, 05 Jun 2019 23:33:15 GMT

Been in a HDHP/HSA for several years. The move mid-year to another HDHP/HSA is due to my employer changing carriers/administrators post-merger. I still have some remaining 2018 expenses and will have 2019 expenses prior to the switch for which funds will be payroll deducted into the new HSA.

Yes, you can, although you may find it easier to use the...

DanielV01 — Wed, 05 Jun 2019 23:33:16 GMT

Yes, you can, although you may find it easier to use the remaining funds in your older account first. As long as you remained HSA eligible the entire time, the new account is treated as having begun when the old account did. If there was a gap in time (lapse of qualifying HDHP insurance, for example), then the new bank account could not be used for the expenses. It would be treated as a new HSA account, and you cannot use a new HSA account to pay on already existing expenses. But your details state that you had qualifying insurance the entire time. No issues in using the new account.

Actually, the new HSA acquires the establishment date of...

dmertz — Wed, 05 Jun 2019 23:33:18 GMT

Actually, the new HSA acquires the establishment date of the old HSA as long as there was a nonzero balance in the old HSA at any time in the 18 months prior to the funding of the new HSA. (IRS Notice 2008-59 Q&A-41) In other words, a gap of up to 18 months is permitted. That requirement is certainly met in this case since the old HSA does not yet have a zero balance. Either HSA account can be used to pay for any medical expenses incurred after the old HSA was established.

Thank you DanielV and dmertz. Assumptions are correct r...

mikeyjc — Wed, 05 Jun 2019 23:33:19 GMT

Thank you DanielV and dmertz. Assumptions are correct regarding zero HDHP gap, never a zero HSA balance, and intend to use up the old HSA funds first. The latter is to enable me to close the account after using up the funds to avoid fees. Only the new HSA account will be "fee-free" from the employer. Regards.