If I switch jobs, and my new employer has an HSA, am I allowed to use that HSA to pay medical expenses incurred in the past (was using employer's HSA to pay)?

[aj_estacion]

I have an HSA through my current employer, and have been using it to make monthly payments for a medical bill I incurred while having the HSA. If I transition to a new job with a new employer and a new HSA, can I use the new HSA to continue making payments towards my medical bill? Or is there a way to use my old HSA at the new employer?

[BMcCalpin]

The HSA belongs to you, not to the employer. Like an IRA, you can take it with you when you change jobs.

The employer is actually providing HDHP insurance coverage (High Deductible Health Plan), not the HSA, which is normally provided by a third-party financial institution. Yes, the employer may help you set up the HSA, but you don't have to make a new one if you already have one.

You will have to tell your employer the name of the HSA administrator (the financial institution you have been using) and the HSA account number so that they can deposit their contributions and your contribution via payroll deduction into the correct account.

Otherwise, just continue using the HSA and making payments as you have before.

[aj_estacion]

@TurboTaxBillMc so I've communicated with my Benefits team at my new employer, and it looks like they have a different account administrator from my old HSA account, and essentially told me there's no way to transfer my old HSA to my current employer and to make contributions directly into the account. So is there a work-around to continue adding money to my old HSA so that I can continue using it to pay for past medical bills?

[BMcCalpin]

Well they should be able to do it, but...

Tell your new employer to help you create a new HSA and have them contribute to your new HSA. But note that you can continue to take distributions from your old HSA (pay for medical expenses) until the funds in the old HSA are exhausted. At that point, you can close it. Then you can use the new HSA exclusively.

There is no problem with having two HSAs - you can contribute to both (if your employer agrees) and pay out of both. or contribute to one and still pay out of both, until the other runs out of funds.

[aj_estacion]

@TurboTaxBillMc the medical expense I'm paying on a monthly basis was incurred last November and my new HSA was just opened this month so I can't use that to pay for my medical expense. I still have over a $2500 balance on the medical bill and my old HSA's funds are almost exhausted. Having said that, is there ANY way to continue paying those medical expenses with pre-tax dollars?

Thank you.

[BMcCalpin]

Yes, you can make direct contributions to your old HSA by sending a check to the HSA administrator. This is called a "personal" contribution, and will appear on line 25 of page 1 of your 1040 as an adjustment to income. It's not quite as good as a payroll deduction because the payroll deduction not only doesn't pay income on the HSA contribution, it also doesn't pay Social Security taxes or Medicare taxes. However, in your case, it's a good second place.

Pass your payments for those medical expenses through your HSA, and you will convert the dollars that you pay those expenses from after-tax to pre-tax dollars.

[earth777]

Thanks.  I have been trying to figure this out but was not able to find any guidance.  It seems when you change jobs or HD plans and they require to use their own bank/HSA administrator, the clock "resets" in terms of past medical bills so the only way is to keep your older HSA active (assume you can as long as you keep it funded) and keep funding it to pay older expenses.  tax benefits will then be figured out as part of 1040.

[dmertz]

The clock does not reset as long as you have had an HSA account with a nonzero balance within the 18 months prior to the establishment of the new HSA account.  If you established the new HSA within that period, you can reimburse yourself from the new HSA for any medical expense incurred after the establishment of the previous HSA.

See IRS Notice 2008-59 Q&A-41:  <a rel="nofollow" target="_blank" href="https://www.irs.gov/irb/2008-29_IRB">https://www.irs.gov/irb/2008-29_IRB</a>

[earth777]

Thank you very much.  This is exactly what i was looking for.

[lindyrig]

Does this mean that I pay the bill then reimburse myself rater than making a direct payment.  

[NCperson]

@lindyrig - you are posting to a very old thread, so not sure of your question,

Most HSA's give you a debit card to pay your medical bills.  if you use that card, the money will be deducted directly from the HSA and pay the provider.

Alternatively, you can pay the provider yourself and then get reimbursed from the HSA. Personally, I do it this way, so I can get the 1.5% my credit card company gives me!

[dmertz]

@lindyrig , yes, as long as the qualified medical expense was incurred after the establishment of your HSA account and the expense was not included on Schedule A, you can reimburse yourself with a distribution from the HSA at any time in the future.  Just keep the records that show the medical expense for which you were reimbursed.