I have the following scenario. I am reading through the IRS publication on HSA's.
- Have an HSA that was funded while I had an eligible plan and let's say it has $1000 dollars in it
- Change to a non HSA Health insurance plan
- Incur $5000 of medical expenses
- Keep my HSA account open
- Switch back to an HSA plan and fund it
- Use funds to pay bills from previous year
Everything I can find seems to say that as long as HSA funds are used for expenses incurred after the HSA account was initially funded it is OK. This seems too good to be true and I think I have to be missing something. Congress and the IRS generally don't leave loop holes like this.