Can an HSA overdraw their account?

Obviously, sometimes they will overdraw, though. How do you all handle when that happens?

I read somewhere that you can't collect and have to charge off within 60 days due to the issues with contributions, etc on these. Can we charge an overdraft fee?

Fees can be charged, however, they cannot cause the account to become negative. HSAs are subject to the prohibited transaction rules under IRC Sec. 4975. If a FI pays a transaction causing the account to go negative, and it results in a loan or credit obligation in the HSA, the Dept. of Labor and Treasury Dept. may view it as a prohibited transaction under IRC Sec. 4975.

To make it easy, we simply do not charge OD fees or cover transactions that would make the account go negative. Hope this helps.