Two different questions get filed under “HSA rollover,” and mixing them up is what sends people to a search box. One is the year-end question: does the money left in the account disappear on December 31? The other is the moving question: how do you get a balance out of the custodian your old employer picked and into one you actually chose?
The first answer is simple and good. The second has a rule that can cost you real money if you get it wrong. Everything below comes from IRS Publication 969, the Form 8889 instructions, and the revenue procedures that set the annual figures, all read on September 5, 2026. This is a summary of published rules, not tax advice for your return.
Does HSA Money Roll Over? Yes, All of It
Publication 969 settles it in one sentence: amounts that remain at the end of the year are generally carried over to the next year. There is no cap on the carryover, no percentage limit, and no expiration date.
So “use it or lose it” simply does not apply to an HSA. HealthCare.gov says the same thing in plain language, that Health Savings Accounts are not use-it-or-lose-it and your balance rolls over year to year so you can build up savings for care you need later.
Money you leave alone keeps its tax treatment. Publication 969 lists among the benefits of an HSA that the contributions remain in your account until you use them and that the interest or other earnings on the assets in the account are tax free. Distributions for qualified medical expenses come out tax free whenever you take them, this year or in twenty years.
Two practical consequences follow. There is no reason to burn down an HSA in December the way people scramble to spend an FSA. And because there is no deadline on the other end, a qualified expense you paid out of pocket can be reimbursed from the account years later, as long as it was incurred after the HSA was established and you never deducted it elsewhere. That makes a shoebox of receipts worth actual money. If you are trying to size this year’s deposit, HSA contribution limits has the current ceilings.
The Account Follows You Out of the Job
This is the part people are most often wrong about, usually because they are thinking of an FSA.
Publication 969 says an HSA is portable, and that it stays with you if you change employers or leave the work force. HealthCare.gov is blunter: even if your employer contributes to your Health Savings Account, you own the account and the money in it.
Quitting, getting laid off, retiring early, or going uninsured for a stretch does not forfeit a cent. What changes is your ability to add money. Contributions require coverage under an HSA-qualified high deductible plan, which for 2026 means a deductible of at least $1,700 for self-only coverage or $3,400 for family coverage, with out-of-pocket maximums no higher than $8,500 and $17,000, under Revenue Procedure 2025-19. For 2027 those thresholds rise to $1,750 and $3,500 in deductibles and $8,700 and $17,400 in out-of-pocket maximums under Revenue Procedure 2026-24.
Lose the plan and the contributions stop. The balance keeps working as a pre-tax checkbook for cash-price care. Can you have an HSA without insurance walks through exactly what you can and cannot do with an existing balance while you are between plans.
Transfer or Rollover: Use the Transfer
Here is the rule worth reading twice, because the two methods sound identical and are not.
A rollover means the custodian sends the money to you and you deposit it into another HSA yourself. Publication 969 says you must roll over the amount within 60 days after the date of receipt, and that you can make only one rollover contribution to an HSA during a 1-year period. Miss the 60 days and the amount becomes a non-qualified distribution: ordinary income tax plus the additional 20% tax that applies before age 65. Do it twice inside twelve months and the second one is not a valid rollover either.
A trustee-to-trustee transfer means you instruct the current custodian to send the funds directly to the new one. Publication 969 is explicit that this is not considered a rollover and that there is no limit on the number of these transfers. You do not report it as a contribution or a distribution on Form 8889.
The transfer has no 60-day clock, no once-a-year limit, and no chance of an accidental taxable event. Unless you have a specific reason to take possession of the money, ask the receiving custodian for a transfer form and let the two institutions handle it.
One more useful detail from Publication 969: you do not have to be an eligible individual to make a rollover contribution from your existing HSA to a new HSA. Consolidating old accounts is allowed even in a year when you cannot contribute a dollar.
The Once-in-a-Lifetime IRA to HSA Move
There is a way to get retirement money into an HSA, and it is narrower than it sounds.
Publication 969 calls it a qualified HSA funding distribution. It moves money from a traditional or Roth IRA directly to your HSA. It cannot come from an ongoing SEP IRA or SIMPLE IRA, and it must be made directly by the IRA trustee to the HSA trustee.
The limits are strict. You can generally make only one qualified HSA funding distribution during your lifetime. The amount cannot exceed the HSA contribution limit that applies to you, and it is not an extra allowance: the distribution is not deductible and it reduces the amount you can otherwise contribute for the year. For 2026 that ceiling is $4,400 for self-only coverage and $8,750 for family coverage under Revenue Procedure 2025-19, rising to $4,500 and $9,000 for 2027 under Revenue Procedure 2026-24, plus the $1,000 catch-up the Form 8889 instructions allow anyone age 55 or older at the end of the tax year.
Then there is the testing period. Publication 969 requires you to remain an eligible individual from the month of the transfer through the last day of the 12th month following it. Fail that for any reason other than death or disability and you include the whole distribution in income in the year you fail, plus a 10% additional tax, computed in Part III of Form 8889.
The narrow exception: if you make the transfer in a month you have self-only coverage and later switch to family coverage in the same tax year, you can make a second one, capped in total at the family limit plus any catch-up.
Medicare Stops the Contributions, Not the Spending
Publication 969 says that beginning with the first month you are enrolled in Medicare, your contribution limit is zero. That rule applies to periods of retroactive Medicare coverage too, so if you delayed applying and your enrollment is later backdated, anything you contributed during the backdated months counts as an excess contribution.
Nothing about Medicare touches the balance. You keep spending it tax free on qualified medical expenses, and once you are 65 the additional 20% tax on non-qualified withdrawals no longer applies, though ordinary income tax still does.
What Happens to an HSA at Death
The answer turns entirely on the beneficiary form, which is worth ten minutes of your time.
If your spouse is the designated beneficiary, Publication 969 says the account is treated as your spouse’s HSA after your death. It keeps every tax advantage it had.
If your spouse is not the designated beneficiary, the account stops being an HSA and the fair market value becomes taxable to the beneficiary in the year you die, reduced by qualified medical expenses of yours that the beneficiary pays within one year of death. If your estate is the beneficiary, the value is included on your final income tax return.
That is a sharp difference in outcome for one line on a form. Check who is listed.
Where Unused Money Goes: HSA vs Health FSA vs HRA
All three are tax-favored health accounts and only one of them is really yours. The 2026 figures below come from Revenue Procedure 2025-32 (health FSA) and Revenue Procedure 2025-19 (excepted benefit HRA); the mechanics come from Publication 969.
| Question | HSA | Health FSA | HRA |
|---|---|---|---|
| Who can fund it | You, your employer, or anyone else | You, by salary reduction under a cafeteria plan | Employer only, never salary reduction |
| Money left at the end of the year | Carried over to the next year | Forfeited, unless the plan adds a grace period or a carryover | Some, but not all, HRAs let it carry to the next year |
| Cap on what carries over | None | Up to $680 for plan years beginning in 2026, against a $3,400 salary reduction limit | Set by the employer’s plan |
| Grace period | Not applicable, nothing expires | Up to 2 1/2 months after the plan year, and a plan cannot offer both a grace period and a carryover | Not applicable |
| Can the balance be paid to you in cash | Yes, but non-qualified withdrawals are taxed plus an extra 20% before age 65 | No, the employer is not permitted to refund any part of the balance | No, the employer is not permitted to refund any part of the balance |
| If you leave the employer | The account and the balance go with you | It is the employer’s cafeteria plan, so the account does not follow you | It is an employer-established plan, so it does not follow you |
A few notes the table cannot hold. General HRAs have no statutory contribution ceiling, but the narrower excepted benefit HRA is capped at $2,200 newly available for plan years beginning in 2026 and $2,250 for 2027. Self-employed people are not eligible for HRAs at all under Publication 969, which is one reason the HSA is the account that matters if you work for yourself. And a general-purpose health FSA disqualifies you from contributing to an HSA, which is exactly the problem a limited purpose FSA exists to solve. For the fuller side-by-side comparisons, see HSA vs FSA and HRA vs HSA.
The Bottom Line
An HSA balance rolls over in full, indefinitely, and belongs to you rather than to a job. That is the single most valuable feature of the account and the one most often confused with the FSA rule that forfeits anything over $680 at the end of a 2026 plan year.
The only place the word rollover gets dangerous is when you are moving an account. Take the money in hand and you are on a 60-day clock with a one-per-12-months limit. Ask for a trustee-to-trustee transfer instead and neither limit applies.
If you are shopping for a plan that lets you fund one, HealthCare.gov flags qualifying plans with an “Eligible for an HSA” filter and notes that all bronze and catastrophic plans work with Health Savings Accounts. See catastrophic health insurance for who qualifies for those, self-employed health insurance cost for what the premiums actually run, and HSA for the self-employed for opening one with no employer involved. When you are ready to spend the balance, check the going cash rate first with the fair price tool. If any of this touches a real filing decision, run it past a tax professional.