An HSA is a custodial account (similar to an IRA) and must be “established” before you are eligible to make withdrawals from your HSA.
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.
