Currently we have a policy to not permit overdrafts on HSAs. All items are returned. I would appreaciate input from other financial institutions as to their practice regarding overdrafts on HSAs and operational and customer service issues that result. Are there any IRS reporting issues with OD charges? Thank you for your input.

You are handling them in the only manner that is appropriate. You might want to review this:

http://www.bankersonline.com/operations/guru2009/gurus_op070609a.html

Thank you, that is it exact infomation I needed to support our earlier decision. I just could not remember why we had taken that position.

We are working through a project to offer a Line of Credit on an HSA. Does anyone who has already done this have any lessons learned? Would anyone be willing to offer up their periodic statement as an example?