Do health spending Accounts (HSAs) carryover? Yes, they can, and at Coastal HSA all accounts carryover to allow employees to save up for larger health expenses. However, all carryover is limited to one year per Canadian Revenue Agency (CRA) guidelines. All plans at Coastal HSA renew on January 1st, so any carryover is applied on this date.
Health Spending Accounts (HSAs) Carryover
Carryover example:
Ella’s Journey in 2022:
- At the beginning of 2022, Ella has a balance of $2,000 in her HSA.
- During 2022, Ella spends $1,000 for qualified medical expenses.
- When the plan renews in 2023, the remaining $1,000 will carry over.
- Ella will then have a balance of $2,000 (plan amount) + $1,000 (carryover) for a total of $3,000 at the start of 2023.
Ella’s Journey in 2023:
- At the start of 2023, her HSA balance is $3,000.
- During 2023, she spends only $500.
- When the plan renews in 2024, Ella will forfeit any unused carryover from 2022, which is $500 in this example. However, she will carry over her full balance from 2023, which is $2,000.
- Therefore, she will have a balance of $2,000 (plan amount) + $2,000 (carryover) for a total of $4,000 at the beginning of 2024.
Read More: Do Health Spending Accounts Cover Telemedicine?
Summary
By understanding how the carryover feature works and taking full advantage of it, you can enjoy the peace of mind that comes with financial flexibility when it comes to your health expenses.
