An HSA is a custodial account (similar to an IRA) and must be “established” before you are eligible to make withdrawals from your HSA. Through Benefit Resource’s partnership with UMB Bank (as the trustee/custodian), an account is considered established on the later of a) the date you are first eligible for the HSA or b) when you open your account.
Example of why establishing an HSA matters:
Joan begins HSA-compatible health plan coverage on January 1. On January 15, Joan goes to the doctor and is billed $250 for the visit.
- Scenario 1: Joan established her HSA January 1. If she had $250 in the account, then payment for the January 15 expense could be paid directly from her HSA. Otherwise, Joan has the option of reimbursing herself once the balance reaches $250.
- Scenario 2: Joan does not open then establish her HSA until February 1. The $250 expense from January 15 would not be an eligible expense.
