Can incurred claims be paid from an HSA acccount that has not been funded?
Currently, guidance directly from the IRS does not define the term “established” in the context of HSA accounts. However, they suggest that by using the basic principles of trust law, a trust is not “established” until it is funded. Until further guidance is distributed, the HSA account should be funded to be considered established. This would therefore mean that claims incurred between the effective date of the high deductible health plan and the funding of the HSA cannot be paid with HSA funds. Example: health plan is effective 7-1-2005. The HSA Bank Account is set up 9-1-2005. The HSA account is funded 12-1-2005. Claims incurred 7-1 thru 11-30-2005 cannot be paid with HSA funds.
