How do I "Establish" my HSA and when is it considered established?

According to the IRS, you can reimburse yourself for qualified expenses after you "establish" your HSA. Additionally, the IRS has provided formal guidance that you don't establish your HSA when you first enroll on HSA-qualified coverage (see IRS Notice 2008-59, Q&A 39) or when you first become HSA-eligible.

Rather, your HSA is established according to trust law in the state whose laws govern your HSA. An HSA is a trust, and trusts are regulated by state law. As such, Most states require that you complete three actions to establish a trust:

  1. Signal intent to create or open a trust. Meeting with an attorney or completing a paper or online application typically satisfies this requirement.
  2. Name a beneficiary. This step is often completed at the time that the HSA owner completes the paper or online application.
  3. Place something of value in the trust.

Based on #3, you don't establish your HSA until the first deposit is posted to the account. Because this is the case, it is highly recommended that each person opening an HSA fund the account with as little as one penny ($0.01) to consider it established. Any expense incurred thereafter can be reimbursed using HSA funds at some point in the future. 

Please be sure to speak with a tax and/or legal professional to discuss your own situation as nothing contained here is intended to be tax or legal advice.  

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