You can move money from one HSA to another, but the rules depend on whether you're switching accounts or changing employers
A rollover of an HSA means moving money from one HSA to a different one without triggering taxes or penalties. The IRS allows one rollover per 12-month period, and the money must land in the new account within 60 days. If you miss that window, the IRS treats the withdrawal as a regular distribution, which means you'll owe income tax on the amount plus a 20% penalty if you're under 65.
The more common path is a direct transfer (also called a trustee-to-trustee transfer), where your old HSA custodian sends the money straight to your new one. This route has no 60-day deadline and no annual limit—you can do it as many times as you need. Most people use a direct transfer when they change jobs or want to move to a different bank or investment firm.
Key Takeaways
- A rollover lets you move HSA money yourself within 60 days; a direct transfer sends it straight from one custodian to another with no deadline or frequency limit.
- You can roll over or transfer your HSA when you leave a job, switch health plans, or simply want to move to a different financial institution.
- If you miss the 60-day rollover window, the IRS taxes the withdrawal as income and adds a 20% penalty unless you're 65 or older.
- Your new HSA must be with a bank, credit union, or investment firm that holds HSAs—not every financial institution offers them.
When you leave a job and lose access to your employer's HSA
If your employer closed your HSA or you're no longer may be able to access to contribute, you can still move the money to a new account you open yourself. Your employer's HSA custodian (usually a bank or benefits administrator) will tell you the deadline by which you must move the funds—this varies by plan, but is often 30 to 60 days after you leave.
Request a direct transfer form from your new HSA provider and give it to your old custodian. The old custodian sends the full balance directly to the new account. You keep the money, keep the tax-free status, and the transfer doesn't count against your one-rollover-per-year limit.
If you can't find a new HSA provider in time or want to keep the money liquid, you can also withdraw it yourself and roll it over within 60 days. But this is riskier: if the 60 days pass, you owe taxes and penalties on the full amount.
Rolling over when you change health plans but stay with the same employer
Some employers offer multiple health plans during open enrollment. If you switch from one plan to another and both have HSAs, you usually stay with the same HSA account—no rollover needed. The money follows you because it's yours, not the plan's.
However, if your old plan had an HSA and your new plan doesn't (or vice versa), you'll need to move the money. If you're moving away from an HSA, you can withdraw the balance and roll it to a personal HSA you open on your own. If you're moving into an HSA for the first time, you can open a new account and fund it with money from savings or a previous HSA.
The difference between a rollover and a direct transfer
| Rollover | Direct Transfer |
|---|---|
| You withdraw the money and deposit it yourself | Custodian sends money directly to new custodian |
| Must complete within 60 days | No deadline |
| Limited to one per 12 months | No limit on frequency |
| 20% penalty if deadline is missed (under 65) | No penalty risk |
| You hold the money temporarily | Money never leaves the HSA system |
A direct transfer is almost always the safer choice because it removes the 60-day clock and the one-per-year limit. Use a rollover only if your new HSA provider doesn't offer direct transfers or if you need the money in your hands temporarily for some reason.
What happens to your HSA if you don't roll it over
If you leave your job and don't move the money, your old HSA account stays open as long as the custodian allows. You can usually keep it there indefinitely, though some employers require you to move it within a set window (often 30 to 90 days). Check your plan documents or call your old custodian to find out.
The risk of leaving money behind is that you might forget about it or lose track of the account. HSA custodians are not required to search for you if you move or change contact information. If you do leave money in an old account, you can still withdraw it or roll it over later—the tax-free status doesn't expire. But the longer you wait, the more likely you are to lose the paperwork or forget the account exists.
Rolling over an HSA after age 65
Once you turn 65, the rules change slightly. You can still roll over or transfer your HSA the same way, but if you withdraw money for non-medical expenses, you only owe income tax—the 20% penalty goes away. This makes an HSA function like a traditional IRA after 65, which is why many people keep their HSAs open even after they enroll in Medicare.
If you're on Medicare, you can no longer contribute to an HSA, but you can still hold one and withdraw money tax-free for may have access to medical expenses. Rolling over to a new account works the same way as before.
How to start a rollover or direct transfer
First, open a new HSA with a bank, credit union, or investment firm that offers HSAs. Not all financial institutions do, so you may need to search. Common HSA providers include Fidelity, HealthEquity, Lively, and various regional banks.
Once your new account is open, ask your new HSA custodian for a direct transfer form. Fill it out with information about your old HSA (account number, custodian name, routing number). Send the form to your old custodian and keep a copy for your records. The transfer usually takes 5 to 10 business days.
If you're doing a rollover instead, withdraw the money from your old HSA, get a check or bank transfer, and deposit it into your new HSA within 60 days. Report the rollover on your tax return (Form 8889) to show the IRS it was not a taxable distribution.
Frequently Asked Questions
Can I roll over an HSA to an IRA or other retirement account?
No. HSA money can only move to another HSA. If you withdraw it for any other reason, it's treated as a taxable distribution (plus the 20% penalty if you're under 65 and it's not for medical expenses). An HSA is its own account type and cannot be converted to an IRA or 401(k).
What if I miss the 60-day rollover deadline?
The IRS treats the withdrawal as a regular distribution. You owe income tax on the full amount, plus a 20% penalty if you're under 65. The only exception is if you can show reasonable cause for the delay—contact the IRS or a tax professional to discuss your situation.
Do I need to report a direct transfer on my tax return?
No. A direct transfer is not reported on your tax return because the money never leaves the HSA system. A rollover must be reported on Form 8889 to show the IRS it was a non-taxable transfer, not income.
Can I roll over an HSA if I'm no longer may be able to access to contribute?
Yes. You can roll over or transfer an HSA even if you're no longer on a high-deductible health plan or no longer employed. The money stays tax-free as long as it goes into another HSA. You just can't add new contributions once you're ineligible.
What if my new HSA provider won't accept a direct transfer from my old one?
This is rare, but if it happens, ask your new provider why. Most custodians accept transfers from any other HSA. If yours refuses, you can do a rollover instead—withdraw the money yourself and deposit it within 60 days. Then file a complaint with your state's banking regulator if the refusal seems unreasonable.