Once you are no longer enrolled in a qualified HDHP, you will stop being able to contribute additonal funds to your HSA. The maximum contribution to your HSA for that tax yeart would be determined by the number of months you were enrolled in the qualfied HDHP.

• To determine your pro-rated contribution amount, you would divide the full annual individual or family maximum contribution amount allowed for that tax year by 12 months You would then multiply the number of months you were enrolled in the qualified HDHP by the montly pro-rated maximum to determine you allowed maximum contribution for that tax year.
• For example: 2017 individual max $3,400 ÷ 12 months = $283.33 montly pro-rated maximum contribution. If you were enrolled in a qualified HDHP for 5 months your maximum contribution for that tax year would be 5 x $283.33 = $1,416.66.

REMEMBER: You can continue to use any remaining funds in your HSA to pay for qualified medical, dental or vision expenses tax-free even if you are not enrolled in a qualified HDHP.

Since you own your HSA, you will be able to keep your account, even if you change health plans or change employers. However, if you no longer are enrolled in an qualfied HDHP you are not eligible to make future contributions to your HSA, but you may continue to use your HSA to pay for qualified medical, dental or vision expenses.

Your HSA is an inheritable account. What happens to your HSA when you die depends who you named as your beneficiary.

1. Spouse designated beneficiary. If your spouse is your designated beneficiary, the account will be treated as your spouse’s HSA after your death. The account will continue to be tax-free for qualified medical distributions. If your spouse is covered by a qualified HDHP, contributions to the account may also be made tax-free, up to maximum annual contribution limits.
2. Other than Spouse designated beneficiary. If you designate someone other than your spouse as the beneficiary of your HSA:
• The account stops being an HSA on the date of your death;
• The fair market value of the HSA becomes taxable to the beneficiary in the year in which you die (without penalties); and
• The amount taxable to a beneficiary (other than your estate) is reduced by any qualified medical expenses you incurred prior to your death that are paid from the HSA by the beneficiary within one year after the date of death.
3. Your estate is the beneficiary. If your estate is the beneficiary of your HSA, the value of your account is included on your final income tax return. NO designated beneficiary on file. If you do not have a beneficiary on file, the funds are payable to the accountholders estate.

 At age 65 and older, your funds continue to be available without federal taxes or state tax (for most states) for qualified medical expenses; for instance, you may use your HSA to pay certain insurance premiums, such as Medicare Parts A and B, Medicare HMO, or your share of retiree medical coverage offered by a former employer. Funds cannot be used tax-free to purchase Medigap or Medicare supplemental policies. If you use your funds for qualified medical expenses, the distributions from your account remain tax-free. If you use the monies for non-qualified expenses, the distribution becomes taxable, but exempt from the 20 percent penalty. With enrollment in Medicare, you are no longer eligible to contribute to your HSA. If you reach age 65 or become disabled, you may still contribute to your HSA if you have not enrolled in Medicare.