HSA after leaving the US: the account everyone forgets when they move to Japan
Disclosure: this article links to Taxes for Expats. If you sign up through those links I may earn a commission, at no extra cost to you. It does not change what I recommend — I link to what I actually use or would use, and I say when I have not tested something.
The short version. Your Health Savings Account survives the move to Japan intact — the balance, the investments, and the tax-free growth all keep going. But the day you switch onto Japan’s national health insurance, you almost certainly lose the right to contribute (no Japanese plan counts as a US HDHP). You can still reimburse yourself tax-free for qualified medical bills — including care you get in Japan — as long as you keep the receipts. The messy part is Japan’s side: the US–Japan treaty doesn’t mention HSAs at all, so how Japan taxes the account is genuinely unsettled. Sort out receipts and 2FA before you leave.
I’ll be honest up front: I never opened an HSA myself. My employer put me into a 401(k) with a match, and the HSA was the one benefit I skipped. So this comes from research I did for my own US-to-Japan exit — including whether I could even keep my accounts open after becoming a non-resident — not from a balance I personally carry. Where the answer is “nobody really knows,” I’ll say so instead of guessing.
Can you still contribute after you move to Japan?
Almost certainly not. The IRS runs a four-part test (Pub. 969), and you have to pass all four on the first day of every month to contribute that month:
- You’re covered by a qualifying high-deductible health plan (HDHP)
- You have no disqualifying other coverage
- You’re not on Medicare
- Nobody claims you as a dependent
The one that kills it is #1. Japan’s kokumin kenkō hoken (National Health Insurance) and shakai hoken (employer social insurance) do not meet the IRS definition of an HDHP. As of my research, a 2026 HDHP requires a deductible of at least $1,700 (self-only) or $3,400 (family) — Japanese public coverage isn’t structured that way at all. So the month you enroll in Japanese health insurance, your contribution eligibility ends.
Watch the last-month rule if you leave mid-year. If you were HDHP-eligible on December 1, the IRS lets you treat yourself as eligible for the whole year — but you then have to stay eligible through the end of the following year, or the extra contributions get pulled back into your income plus a 10% additional tax. Moving abroad breaks that testing period. If you’re leaving late in the year, this is a real trap: contributing the full-year limit (as of my research, $4,400 self-only / $8,750 family for 2026 — verify at IRS.gov before acting) on your way out could cost you the tax on those dollars plus the penalty.
Decision rule:
- If you’ve already enrolled in Japanese health insurance → stop contributing. Any contribution for that month or later is an excess contribution.
- If you’re still on a US HDHP for a few more months → you can contribute pro-rata, but do not use the last-month rule to front-load a full year unless you’re certain you’ll pass the testing period.
What actually happens to the money
Good news here, and it’s the part people miss: the account stays yours. The balance, whatever mutual funds or ETFs you hold inside it, and the tax-free growth all continue regardless of where you live. You can keep the invested funds invested. You just can’t add new money.
In practice it behaves like a frozen-but-growing account: no deposits, full investment upside, still tax-advantaged on the US side. (One caveat: while your custodian can’t close the account just because you moved, some do restrict investment options or freeze trading for non-US addresses — more on that in the pre-departure section below.)
Using HSA money for medical care in Japan
Qualified medical expenses under IRC §213(d) are reimbursable from your HSA no matter which country the care happened in. The country of service doesn’t matter — the nature of the expense does. Doctor and specialist visits, hospital care, dental, vision, mental-health therapy, and prescription drugs in Japan can all be paid back to yourself tax-free, as long as:
- the treatment is legal in Japan, and
- it wasn’t already reimbursed by your insurance.
You need documentation, and you need to keep it indefinitely — there’s no IRS statute of limitations on a receipt you haven’t reimbursed yet. Hang onto:
| Keep for every expense | Why |
|---|---|
| The original receipt | Proves the expense and amount |
| The exchange rate on the payment date | You reimburse in USD; you need to show the conversion |
| Proof no insurance paid it | HSA can’t reimburse anything insurance already covered |
Given how Japanese public insurance already covers 70% of most bills, your out-of-pocket 30% is often the reimbursable slice. When my wife had a US medical episode, the bills dribbled in over a full year — save everything as it arrives, don’t try to sort it later.
Pulling money out for non-medical reasons
If you tap the account for anything that isn’t a qualified medical expense:
| Your age | Tax treatment |
|---|---|
| Under 65 | Ordinary income + a 20% additional tax penalty |
| 65 or older (or disabled/death) | Ordinary income only, no penalty — basically a traditional IRA |
That 20% is steep. If you’re a US person living in Japan and you take a $10,000 non-qualified distribution before 65, you’re looking at ordinary income tax plus $2,000 in penalty. The account rewards patience.
The Japan side — the part nobody can answer cleanly
Here’s where I stop pretending there’s a tidy answer. Japan has no HSA equivalent; the public healthcare system makes one unnecessary domestically. And the US–Japan tax treaty doesn’t mention HSAs at all. That leaves two open questions with no clear published answer:
- Does Japan tax the investment income and gains inside the HSA as they accrue (the way it can treat other foreign accounts)?
- Does Japan tax distributions as ordinary income once you’re a Japan tax resident?
Nobody I found gives a confident, sourced answer — and I’m not a licensed advisor, so I won’t invent one. This is the same “murky foreign-account” territory that makes US mutual funds a problem for Japan residents, which I get into in PFIC and Japanese funds for US persons. Before you take a large HSA distribution as a Japan resident, get an actual professional — a Japan-licensed zeirishi who understands US cross-border cases, ideally paired with a US preparer.
One place to start on the US-filing side is Taxes for Expats — a US–Japan expat tax firm; that link gives $25 off your first filing. (Full disclosure: that’s a referral link — I get a small credit if you file through it. It’s one option, not the only one; the point is to have someone qualified confirm the Japan treatment before you move real money, not which firm you use.) Whatever you spend on one consultation is trivial next to guessing wrong on a five-figure distribution.
Don’t forget the US paperwork either: Form 8889 has to go with your 1040 in any year you contributed to or took a distribution from an HSA — and that obligation follows you to Japan. If you’re mapping out your first filing from abroad, I walk through the timing in your first tax year after leaving the US.
The pre-departure checklist (do this while you still have US access)
The account survives; your access to it is what can break. Custodian portals get twitchy about foreign IP addresses and non-US addresses, and SMS 2FA to a dead US number locks you out cold. Before you fly:
- Download everything — full statement history, transaction records, and receipts — while you’re still logging in from the US without friction.
- Move off SMS 2FA. Set up an authenticator app so a disconnected US phone number can’t lock you out. This is the exact problem I plan around by keeping my own US number alive; see keeping a US phone number for 2FA after leaving and Google Voice vs a real US number for 2FA.
- Check the custodian’s foreign-address policy. Some freeze accounts or restrict investment options for non-US addresses — the same headache I cover in changing your brokerage address to Japan and keeping a US brokerage when you move to Japan. An HSA custodian can be just as strict.
Skipping this doesn’t cost you the money — it costs you hours, sometimes weeks, of support calls and mailed verification letters to reach money that’s technically already yours.
FAQ
Can I keep my HSA if I’m not a US citizen?
Yes. Holding an HSA isn’t tied to immigration status. Whether you’re a US citizen, green-card holder, or a foreign national who worked in the US, the HSA stays open, keeps growing, and stays available for qualified reimbursements after you leave. You just can’t contribute once you’re off a US HDHP.
Should I spend down my HSA before leaving the US?
Not for its own sake. There’s no penalty for letting it sit and grow tax-free, and the funds keep working for future medical costs — including care in Japan. Draining it early on non-medical spending just to “empty it” triggers ordinary income tax plus the 20% penalty if you’re under 65. Only reimburse genuine qualified expenses.
Does Japan tax my HSA?
This is the honest unknown. Japan has no HSA equivalent and the US–Japan treaty is silent on these accounts, so whether Japan taxes the internal gains or the distributions isn’t settled in anything I could find. Treat it as needs-professional-confirmation and talk to a cross-border zeirishi before taking a large distribution as a Japan resident — this is not a spot to rely on a blog, including mine.