Can I Repay a 2017 Medical Bill with Funds from HSA in 2018?

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Using HSA funds for 2017 bills

When it comes to using funds from your Health Savings Account (HSA), there are rules and regulations that dictate what you can and cannot do. One common question that HSA holders have is whether they can repay a 2017 medical bill with funds from their HSA in 2018. Let's delve into this topic to understand the options available to you.

If you're wondering whether it’s possible to use your HSA funds to settle a medical bill from 2017 in 2018, the answer largely depends on when you established your HSA. Generally, you are restricted from using HSA funds for medical expenses incurred before your account was opened, but there are exceptions available.

When 2017 expenses can still qualify

Generally, you cannot use your HSA funds to pay for expenses that were incurred before you opened your HSA account. In this case, if the 2017 medical bill predates the establishment of your HSA, then you cannot use your HSA funds to repay it. However, there are some scenarios where you may be able to use your HSA funds to repay a 2017 medical bill in 2018:

• If the medical expense was incurred after you opened your HSA account but before you funded it, you can still use your HSA funds to reimburse yourself for that expense as long as it was qualified under the IRS rules for HSA expenses.
• If you had an HSA in 2017 and maintained it through 2018, you can use your HSA funds in 2018 to reimburse yourself for a qualified medical expense that occurred in 2017, even if you didn't have sufficient funds in your HSA in 2017.

Keeping records and seeking advice

It's important to keep detailed records and receipts of your medical expenses and HSA transactions to ensure compliance with IRS regulations. If you have any doubts or questions about using your HSA funds for a specific expense, it's always a good idea to consult with a tax professional or financial advisor.