Question: What happens to the money in my health savings account if I havent used it by the end of the year? Is it like a caffeteria plan and I lose it if I dont use it?
Answer: Unlike a cafeteria plan or Flexible Spending Account, any funds in your Health Savings Account remain yours and will grow, tax deferred, until you reach age 65. You never lose the money. Even if you need to use the money for anything other than qualifying medical expenses related to medical, dental or vision, you can do so with a 10% penalty and payment of taxes on the amount withdrawn.