HSA accounts.. what happens when you cancel them?

[demenion]

Hello.

I work for small company.. benefits are not very good but I guess it's better then nothing..

I decided to go with the HSA with my employer, because it would be a waste of money paying monthly medial insurance when I probably would not use it.

The company will make a small deposit every month ($72)

I think I'm going to sign up with my current bank out of convenience. Bank of America currently has a $4.50 monthly fee and 1.5% interest rate. I am wondering how that compares to other companies.

If I lose my job or move companies with better benefits.. or for some reason decide to cancel my HSA account? What kind of penalties should I expect? Do I just get taxed for the money that was deposited into it?

Thanks.

 

[yuchai]

The good news is that the HSA account stays with you regardless of your employer and it's not a "use it or lose it" situation.

But, if you use the money for non-health care related expenses, you get taxed and also get an additional 10% penalty.

 

[V00DOO]

The money is your for life. You can use the money for over counter drugs like cold medicines, pain killers, etc. I already spend over $1k of my HSA on dental works.

 

[jlee]

$4.50/mo..? Try a local bank and see if you can get one for free.