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Rollover and grace periods for Health Spending Accounts (HSA)
Note: This article is about Health Spending Accounts (HSAs) that are administered by League. If you have an HSA through an insurance carrier, it might be a bit different. Learn more in your Wallet.
When your policy period ends, any unspent funds left in your League Health Spending Account (HSA) may rollover into your next policy period. Your employer determines:
Whether these funds rollover
How much of your funds rollover
How long the funds rollover for before expiring
Note: HSA funds can only be available for a maximum total of 24 months, and can only rollover for a maximum of 12 months. This is due to Canada Revenue Agency (CRA) regulations.
How does rollover work?
If your employer chooses to have rollover in place, any or a set amount of HSA funds you don't spend will be added to your funds for the next policy period. When you submit a claim to your HSA in the new policy period, your older HSA funds will be used first.
Example: Your policy period is from Jan 1, 2019 - Dec 31, 2019. You receive a total of $1000 to your HSA. Your employer has rollover in place for a maximum of 1 year.
You only spend $500 of your HSA funds during your current policy period. In your next policy period of Jan 1, 2020 - Dec 31, 2020, this remaining $500 will roll over, so you’ll have a total of $1500 in your HSA.
After your new policy period ends on December 31st, 2020, you still have $1200 remaining in your HSA: $200 from the previous policy period that ended December 31st, 2019, and $1000 from the new policy period. The leftover $200 from the previous policy period will expire, but the $1000 from the new policy period will roll over for one more period.
Grace Period
A grace period is the length of time you have after your policy period ends to submit claims for services received during that policy period. A grace period works together with rollover: left over funds you have from the policy period that ended can be used to cover these claims.
Your employer determines:
Whether there’s a grace period
The length of the grace period
Example: Your policy period ended on August 1st, 2019. Your employer has a 60-day grace period in effect, and 1 year rollover for any unspent funds. You have $50 left over in your HSA from the policy period that ended.
You received a massage from a Registered Massage Therapist (RMT) on July 20th, 2019 that cost $100. You submit this claim to your HSA on August 25th, 2019. You’ll only be reimbursed $50, because these are the only funds remaining in your HSA from your previous policy period. You can’t use funds from your new policy period to cover services received in a previous policy period.