[Calimus]

This is fairly trivial, but I'm curious to see what the consensus is. I only started the HSA account like 2 pay periods before I quit my previous job to take a new position and there is only like $250 in the account. My new employer does not offer an HSA qualified health plan so I can't use the money in the account without tax penalty. I would just leave it in, but the stupid bank takes $2 a month as a maintenance fee. I thought I might be able to do the investment option and earn 13% which would gain just a bit more than the $2 a month and keep the account growing, but you need at least $2500 to use the investment option.

I'm just wondering what you would do in my case? cash it out and take the 10% penalty? or let the money sit and be slowly eaten away by the bank fees in hopes that I'll be eligible for another HSA health plan in the near future?

[Cold Warrior]

10% is only $25 at this point. In a year the bank will have taken $24, at which point the 10% penalty would be $22.60 (should you wait and cash out in a year, for example).

If you feel your current job is stable, and that you'll be there at least a year, I'd cash out and just put it in your IRA or 401k. Maybe there's a loophole for the penalty if an employer doesn't offer an HSA, or you can write it off on your taxes. Don't know.

[zerostar]

Cant you just use it for health care purposes, medications, etc etc tax free? We are offered a HSA but I don't take advantage or know much about it.

[macroy]

Originally Posted by Calimus 

....My new employer does not offer an HSA qualified health plan so I can't use the money in the account without tax penalty. I would just leave it in, but the stupid bank takes $2 a month as a maintenance fee....

You can't use it at ALL without penalty? Or you just can't use it for other purpose (than intended) without penalty? I always thought its a use it or lose it thing (if I'm understanding HSA as the flexible spending or cafeteria plan type of stuff)...

If I don't have the wrong idea - my suggestion would be to get a list of the approved items.. and stock up. We did that last year as my company gives me a $20 credit per pay period if I don't use their medical insurance (I'm on my wife's)... so we had almost $200 to blow by April of this year. I probably have enough band-aids, gauze pads, first aid kits, ibuprofen, and pre-natal vitamins to last me a lifetime....