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The Vanguard Group

Health savings accounts (HSAs): Q&A

Last updated: 31 Mar 2014  BenefitsMailbox, Ext. 34BEN or 800-407-8576

Transfers and rollovers

Can HSA funds be moved to an IRA?


Am I required to take the money out of my HSA at a specific age?

No, there is no mandatory disbursement age. The account belongs to you for life.

Is there a maximum dollar limit on the balance in an HSA?

No, there is no maximum balance limitation. The account can continue to grow.

Can HSA balances be transferred to another administrator?

Yes. There are two ways to move money from one HSA to another:

  • Transfer. This option directs the existing HSA custodian to send the HSA balance (or a portion of the balance) to another HSA custodian. You can have multiple transfers during the year and not be subject to any taxes.
  • Rollover. With this option, the HSA money is sent from the current custodian to you. In turn, you send the money to the new custodian. To avoid any tax consequences, you must complete the rollover within 60 days and the rollover must be reported to the IRS. You are permitted one rollover per year.

What happens to my balance if I terminate employment or retire?

The HSA balance is yours to keep. You can continue to use the HSA funds to pay for qualified medical expenses for you and your tax dependents. Regular distribution rules for qualified expenses will continue to apply.

Can I continue to make contributions to my HSA after terminating employment or retirement?

You cannot make additional contributions to the HSA unless you are covered by an HDHP. You may continue with HDHP coverage through COBRA, but Vanguard will not make any employer contributions to the HSA. Beginning with the first month you are enrolled in Medicare, you are no longer eligible to contribute to your HSA.

May I continue to receive distributions from my HSA after terminating employment or retirement?

Yes. Funds may be distributed from your HSA after termination of employment or retirement. The distribution rules for qualified medical expenses continue to apply.

Will my account balance rollover from year to year?

Yes. The funds remain in your account until they are depleted.