The last time I participated in one of those was over 20 years ago. I ended up using none of the money and lost it all.
That was probably an “FSA” flexible spending account. In an HSA you do not forfeit the balance at the end of the year, you can keep it (though it still must be used only for health care expenditures).
Back in 2000, I had guessed on how much I would use and how it would be used....then came to realize $600 sitting there to be lost. It’s a terrible waste of financial planning with no real incentives.
If they said it could sit in a savings account, up to age 65 (or whenever you start social security), we’d all be better off.
There are different types of plans offered by employers. A Flexible Spending Account (FSA) which is sometimes called a Health Care Spending Account (HCSA) is a “use it or lose it” plan. But the HSA is different, it’s an account you fund tax deferred and any balance just rolls over from year to year so I don’t think it can be lost if you don’t spend it in a given year. You can also invest this tax deferred money that is sitting in your HSA in various mtutual funds offered by the plan, so it’s tax free and it grows (you hope!). I’m using it to stash money for retirement medical expenses which are at least 15 years away so it’s invested in some mutual funds (stock + bonds).
Those were the rules when I had to decide. A lot of people ended up scheduling medical operations they didn't really need rather than lose the money. Lasik surgery was a big winner.
These days, though, the numbers are a lot rougher, especially if you have dependents. If you're trying to get by on a low-premium Bronze plan and your coverage doesn't start until you're ten grand in the hole, then you'd better have ten grand stashed somewhere. I was reasonably frugal during my thirties but I don't recall having a lot of ten thousand dollarses lying around. How a family of four managed independent health care under 0bamacare I really can't imagine. And the IRS was waiting for them if they didn't.
You may be confusing Healthcare Savings Accounts with Healthcare Spending Accounts. The later is for use only on medical expenses in a given year, and if you don't use it then you lose it. Healthcare Savings Accounts balances can be carried over from year to year and you never lose them.
They’ve changed the rules since then—I ended up in the same place, but was able to get out. I spent every penny on “medical supplies,” and upgraded my first aid kits to full-scale medical kits for prepping. It’s worked out well, but it’s not necessary today.
This change looks really good to me since I’m looking at changing jobs and the new “benefits” has a high deductible. I’d like to build up a reserve, and/or have the deductions tax free...