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I have been with the same employer since 2005. In 2012, I opened an HSA. I used all of the funds by the end of 2013. In 2013, I didn't go with the HSA plan, I switched back to the plan using a Flex Spending account. In 2017, I had several medical bills, currently approximately $1000. On October 1, 2017 (this is when our plan year starts over), I switched back to an HSA plan. I plan to put the maximum amount into my HSA before the end of the year. Can these funds be used to pay off my medical bills which came prior to October 1, 2017? Originally, I was told no, by an HSA representative. But then they told me it might be possible, since I did start an HSA in 2012. Any advice?

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    Was the HSA account "open" during the time between 2013-2017, even if it didn't have any money in it? – Ben Miller - Reinstate Monica Oct 10 '17 at 0:22
  • When you said that October 1 is when your plan year starts over, is October 1 the day that your new plan actually takes effect, or is that the day that you can choose which plan you will be in for next year? – Ben Miller - Reinstate Monica Oct 10 '17 at 0:51
  • Have you called the bank that houses your HSA? – quid Oct 10 '17 at 4:48
  • I was told to consult with a professional. The plan starts Oct 1, 2017 and ends Sep 30, 2018. We signed up for our plans in August. – Amy Oct 12 '17 at 17:52
  • @Amy If you do ask a professional your question, please come back here and tell us what he or she says. – Ben Miller - Reinstate Monica Oct 13 '17 at 22:50
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I can't find a definitive source to back this up, as all sources are about accounts that were newly opened, but my understanding of it based on similar conversations with my HR people indicate that yes, you can. As long as the account remained open (even if it was empty), and you deposit funds into that same account, you may use that account to pay any medical bills accrued during that time. The IRS guidelines specifically use the wording "Expenses incurred before you establish your HSA are not qualified medical expenses."

If the account was closed and re-opened, any bills accrued prior to re-opening would not be eligible. If a new account was opened for 2017, the new account may not be used for bills accrued prior to opening.

Another SE Q&A on the same issue seems to confirm.

  • My understanding was the account was never closed, it just had no funds in it. Thanks for the info. – Amy Oct 12 '17 at 17:54
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Your new health plan should start Jan 1, while elections begin in October for the next year plan. (Please check this, tax code and health insurance is setup to run on a calendar year basis.) Your new health plan allows contributions to your HSA which won't apply this year, unless you're able to change your plan before the end of the year. Any contributions to your HSA can be paid out for medical expenses and aren't constrained by time as long as the medical expense was incurred after your HSA was opened.

Details via IRS 8889 https://www.irs.gov/pub/irs-pdf/i8889.pdf

So, once you open the HSA under a qualified plan, the account is yours for life, you can pay out for any medical expense you have as long as there's money in the account and the medical expense was incurred after you opened the account. I think your issue is that you can't make a qualified deposit into that account until your plan changes, which will be at the beginning of the year, not at the time of your elections. To get your elections changed this year there needs to be one of the following changes:

Change in marital status.
Change in number of dependents.
Change in employment.
Change in dependent eligibility due to plan requirements (e.g., loss of student status, age limit reached).
Change in residence (e.g., employee or dependent moves out of plan service area).
Significant cost changes in coverage.
Significant curtailment of coverage.
Addition or improvement to benefits package option.
Change in coverage of spouse or dependent under another employer plan (e.g., spouse’s employer had no insurance coverage before but now offers a plan).
Loss of certain other health coverage (e.g., plans provided by governmental or educational institutions).
Health Insurance Portability and Accountability Act (HIPAA) special enrollment right events.
Judgments, decrees or orders.
Entitlement to Medicare or Medicaid.
Change in hours worked to less than 30 hours per week on average if the employee and covered family members enroll in another plan providing minimum essential coverage. The employee is eligible for a special enrollment period to enroll in a qualified health plan through a marketplace/exchange. Employees and others covered must enroll in the plan by the first day after coverage ends under the employer plan. See, IRS Notice 2014-55 for details.
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    Many health plans start on other days besides Jan 1st. My current one starts in May, another started in July. This has been with small and large companies. – mhoran_psprep Oct 10 '17 at 1:58
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    We signed up in August, and the plan started Oct 1. I plan to put the maximum contribution into my HSA between the months of November and December, for the tax calender year. – Amy Oct 12 '17 at 17:55

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