HSA deductions without contributions

[fburglee]

Hello.

I have an HSA account that I've funded regularly since June 2020. I recently changed health insurance to one where I'm no longer eligible to have an HSA, but the account is still open with a balance. Every year I receive a Form 5498-SA and claim these as deductions on my return.

Since I can no longer contribute money to this account will I still receive the 5498 and be able to claim the distributions as a deduction?

Thank you.

[Mike9241 · Accepted solution]

You can keep your HSA and use it to pay qualified medical expenses even though you are no longer covered by an HDHP. What you can't do is make contributions to it since you don't have qualifying coverage. 

Since you are no longer making HSA contributions you should not receive a 5498-SA

Distributions from an HSA for qualified medical expenses cannot be deducted as medical expenses on Schedule A. 

[Opus 17]

Distributions are not a "deduction".  They are excluded from taxable income as long as you use them for qualified medical expenses.  You may continue to withdraw money from your HSA to pay medical expenses even though you are no longer allowed to contribute.