2008 HSA set up in 2009?

[KJ Judd]

Can a client set up a health savings account now for 2008 and contribute before April 15, 2009? Back when HSAs were new, you needed to establish the account during the calendar year. This was back when the funding amount was based on your plan deductible, etc.

Did Congress change this as part of those simplifying rules (i.e. can contribute for full 12 months in your initial year, etc.)? I'm looking for any possible way to reduce tax liability for a client. Thanks!

P.S. I also believe the HSA needs to be established before the expense is paid in order to reimburse for a medical expense (even if under a HDHP). Correct?

[veritas]

Did your client

have a qualfied HDHP in place for 2008?


From TB:
Full year contribution allowed regardless of month individual
becomes eligible. Beginning in 2007, an individual who becomes
covered under a high deductible plan during the year can
make a contribution to an HSA as if the individual was an eligible
individual for the entire year. For example, an individual who
first becomes an eligible individual on the last month of the year
can make an HSA contribution as if he or she were eligible for
the entire year. Thus, such individual is allowed to make contributions
for months before the individual was enrolled in a high
deductible health plan. Special rules apply if the individual does
not remain an eligible individual during a full 12-month period.
Exceptions apply in case of death or disability.

You are correct about expenses prior to the HSA being established.

[KJ Judd]

Yes, client had a HDHP for all of 2008. At one time I thought you had to open the account before the end of the 2008 but then had until April 15, 2009 to fund.

I think veritas is saying as long as the HDHP was in effect in 2008, you can open the HSA in 2009 for 2008. Right?

[veritas]

I'm unsure

whethet you can setup the HSA this year. You would think so but I haven't found anything yet.

[KJ Judd]

Those are my thoughts too. You would think you could, but I haven't found anything on it yet. I'll keep hunting.