HSA Claims Proof

[Clover5]

From Florida Blue I can download all the claims going back to the start of the plan in 2020. Is that adequate proof or do I need all the Walgreens and Dr receipts too?

 

[Midpack]

The IRS Provides this Guidance:
You must keep records sufficient to show that:

• The distributions were exclusively to pay or reimburse qualified medical expenses,
• The qualified medical expenses had not been previously paid or reimbursed from another source, and
• The medical expenses had not been taken as an itemized deduction in any year.
• Do not send these records with your tax return. Keep them with your tax records.

For reference, see IRS Publication 969 (Health Savings Accounts > Deemed Distributions from an HSA, under "Recordkeeping")

Follow These Steps
Keep records of all HSA documentation for as long as your income tax return is considered “open” (subject to an audit), or as long as you maintain the account, whichever is longer.
Hold on to any insurance carrier’s Explanation of Benefits (EOB) statement that documents your expenses for services covered under your HSA-eligible health plan.
Keep receipts for all other items purchased with your HSA, for example, vision and dental services.

• Keep records of all HSA documentation for as long as your income tax return is considered “open” (subject to an audit), or as long as you maintain the account, whichever is longer.
• Hold on to any insurance carrier’s Explanation of Benefits (EOB) statement that documents your expenses for services covered under your HSA-eligible health plan.
• Keep receipts for all other items purchased with your HSA, for example, vision and dental services.

https://employee-resources.lumity.c...not prove was for a qualified medical expense.

That said, I built up and spent my HSA over the course of about 15 years, and no one ever asked me for any proof whatsoever.

 

[Clover5]

Thanks! I think I am good.

https://employee-resources.lumity.c...not prove was for a qualified medical expense.

That said, I built up and spent my HSA over the course of about 15 years, and no one ever asked me for any proof whatsoever. YMMB

 

[Keim]

All I do is save my receipts. I write on them the date incurred, and note theywerent charged to HSA. Then when I cadh them in i write anither note on the receipt indicating that date. When IRS asked to see them in 2010 this was sufficient.

 

[RunningBum]

All I do is save my receipts. I write on them the date incurred, and note theywerent charged to HSA. Then when I cadh them in i write anither note on the receipt indicating that date. When IRS asked to see them in 2010 this was sufficient.

This is the first time I've heard of anyone being asked to show the receipts. I'm glad to know the little bit of time I take to organize them each time I have a receipt is worthwhile in case I'm ever asked. Did you have to mail them copies, or email images, or show them in person?

 

[Keim]

This is the first time I've heard of anyone being asked to show the receipts. I'm glad to know the little bit of time I take to organize them each time I have a receipt is worthwhile in case I'm ever asked. Did you have to mail them copies, or email images, or show them in person?

I mailed them copies. I suspected I was audited due to my relatively young age for cashing them in (30's), so included a short note explaining medical issue. That was sufficient-they asked for nothing else.

 

[zinger1457]

This is the first time I've heard of anyone being asked to show the receipts. I'm glad to know the little bit of time I take to organize them each time I have a receipt is worthwhile in case I'm ever asked. Did you have to mail them copies, or email images, or show them in person?

If you use your HSA to pay for medical expenses in the year they occur there is very little chance of the IRS asking for proof, that's what I've done for the past 12 years and never had to show proof. If you were to collect your receipts over a number of years and cash them in all at once it could raise a red flag with the IRS, especially if it's a large amount.

 

[Keim]

If you use your HSA to pay for medical expenses in the year they occur there is very little chance of the IRS asking for proof, that's what I've done for the past 12 years and never had to show proof. If you were to collect your receipts over a number of years and cash them in all at once it could raise a red flag with the IRS, especially if it's a large amount.

And that is what I did.

 

[RunningBum]

Thanks Keim. I am also saving receipts,since 2009, to use later. I'm not worried, but just curious about how they might ask. Thanks for sharing your experience.

 

[sengsational]

I've wondered how long I need to keep the receipts after I pull HSA money out. I took the advice from a smart member here and moved the receipts that I used into the folder with the tax return where I used them. That physical move was good, but I don't plan on keeping that old tax return paperwork forever.

The way I figure it, if you've had an HSA for 15 years, have a balance of $60K, and you pull out $15K, the IRS ain't going to bother you, because it's too easy to come up with $1K per year of receipts. But if you pull closer to all your HSA money out, that might raise an eyebrow, and they might ask for proof.

 

[ocean view]

I've wondered how long I need to keep the receipts after I pull HSA money out.

The statute of limitations is 3 years for Fed. So I would keep the receipts until the statute closes. If your state treats the HSA the same as Fed, confirm the length of your state’s statute as well. Some states are 4 years.

 

[teej1985]

The statute of limitations is 3 years for Fed. So I would keep the receipts until the statute closes. If your state treats the HSA the same as Fed, confirm the length of your state’s statute as well. Some states are 4 years.

That would be 3 years from receiving the HSA distribution, not incurring the charge.

 

[ocean view]

That would be 3 years from receiving the HSA distribution, not incurring the charge.

Agreed, with one further clarification: The regular Fed tax return statute rule is what applies here. Three years from the filing of the tax return for the calendar year in which the distribution was taken, not just three years from the distribution.

 

[Montecfo]

Later of:
1. 3 years from the due date of the return or the date on which it was filed, if later or

2. For as long as you maintain the account

 

[FLSUnFIRE]

What I do is log my expenses in a spreadsheet with date paid, how paid (generally which credit card), provider and amount. I punch the receipts and/or bill (many paid are paid online and for those I notate when paid and which card -I digitally save my CC statements if I need proof of payment) and file in a 3 ring binder. When I reimburse myself, I note on the spreadsheet. This also lets me see how much reimbursement is available to me at a glance.

 

[HenryD]

I have scanned copies of my unclaimed receipts on a cloud drive, and a spreadsheet to track them. For some of the larger bills, it's very complex with multiple months of EOBs for the same claim, partial payments, adjusted bills, etc., etc. I've tried to keep it all correct and straight, but it would be a heck of a forensic accounting task to verify it all to the last dollar. I'm hoping it never comes to that TBH. 4 years of receipts totaling $24K against $60 in the accounts. I expect to draw it over several years.

 

[Montecfo]

Having some sort records that tie to the amount you withdrew is a good start.

As many supporting records as you can (EOBs, receipts, proof of payment) the better off you are.

 

[Exit 2024]

I have paper folders with receipts and EOBs going back to 2006 - first year when we started HDHP with HSA. But wondering if keeping those even worth the hassle- we never took any money out and use HSAs as additional saving vehicle for retirement. We have $180k currently saved and receipts for $37k. I do not mind to send IRS boxes of paper to prove that I have right to take those $37k out based on past spending, but keep thinking that most likely money in HSA will be spent on newly incurred charges during retirement, so that paper keeping may be pointless.

 

[Montecfo]

^^^^ Mine is similar value and I have records but its a small percentage of the value.

No withdrawals.

Statistically, you are correct as we should on average have hundreds of thousands of future medical expenses ($300k+ post 65 according to estimates, excluding LTC).

 

[RunningBum]

I have paper folders with receipts and EOBs going back to 2006 - first year when we started HDHP with HSA. But wondering if keeping those even worth the hassle- we never took any money out and use HSAs as additional saving vehicle for retirement. We have $180k currently saved and receipts for $37k. I do not mind to send IRS boxes of paper to prove that I have right to take those $37k out based on past spending, but keep thinking that most likely money in HSA will be spent on newly incurred charges during retirement, so that paper keeping may be pointless.

You never know, you might need/want $37K tax free next month. I like having these funds available just in case.