6

I used a medical provider who does not deal with insurance. I had already spent my out-of-pocket maximum, so if this provider had dealt with insurance, they would have been paid entirely by insurance with no impact to my HSA.

Instead, I paid them at the time of service from my HSA, and filed the insurance claim myself. Much later, I received a benefit check from insurance. I would like to deposit that benefit check back into my HSA, making everything as-if the HSA hadn't been used here.

My HSA bank lets me make a "return of incorrect distribution" but I do not consider anything here to be a "mistake in fact" as mentioned in the 1099-SA/5498-SA instructions -- the distribution was for qualified medical expenses, and I intentionally used the HSA. But I only wanted the money to come out of the HSA temporarily, not permanently.

Is it possible to put this money back into the HSA? If so, what do I tell my bank so that they handle it properly? Their deposit slip doesn't have any reasonable box to check for this.

The bank is The Bank of New York Mellon. Branding associated with the account is BenefitWallet.

3

"return of incorrect distribution" is the correct box to check.

You took money out and didn't mean to do so. I have had to do this (with a different HSA) on a couple of occasions.

What this does is put the money back in without having it count as a new deposit. Of course if you are no longer under a HDHP then then you should not be making new deposits and doing it this way is very important. They will also remove the distribution from the accounting of distributions.

We had a provider that was being visited a couple of times a month. They wanted to have us pay the full amount when we visited, and then they would return the excess funds back to us by check. After a few visits I convinced them it was a bad idea, because of the amount of transactions that would be happening. If they hadn't agreed with us I would have paid them $80, they would received 80% of $50 from the insurance company, and they would have sent $70 back to me, which I would have had to send back to the HSA.

Other times money has been returned this way because we received a rebate for a prescription or it was determined that our responsibility was actually zero. I have had no problems checking the return of incorrect distribution box.

  • The easier option is to upfront pay it with your personal funds, and only after everything is resolved reimburse yourself from the HSA. – Aganju Jul 18 at 12:51
  • With the HSA website I was using the "pay my provider" button is easy: just enter the doctor info and the amount. The "pay myself" button requires me to also attach the EOB to show the expense and the amount paid by the insurance company. This was much harder, especially since each visit had its own EOB. – mhoran_psprep Jul 18 at 14:26
  • That seems to be provider specific. Mine allows me to simple enter an amount and get it. There is just a message that I need to retain proof for the IRS in case they want to see it (which you need to do anyway). – Aganju Jul 18 at 17:01

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