Does Reg E apply to EFT transactions made to or from a Health Savings Account? I know the IRS commentary excludes IRA's from Reg E coverage but am not sure about HSA accounts. We open both IRA and HSA accounts here at the bank in pretty much the same way - with the bank as custodian of the account. I am working on updating our card agreements for our HSA accounts and want to make sure what we currently have listed is correct in regards to Reg E.

Thanks so much!

Anyone have any thoughts on this?

Paragraph 2(b)(2)

2. Custodial agreements. An account held under a custodial agreement that qualifies as a trust under the Internal Revenue Code, such as an individual retirement account, is considered to be held under a trust agreement for purposes of Regulation E.

IRS Publication 969

A Health Savings Account (HSA) is a tax-exempt trust or custodial account you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur. You must be an eligible individual to qualify for an HSA.

No permission or authorization from the IRS is necessary to establish an HSA. You set up an HSA with a trustee. A qualified HSA trustee can be a bank, an insurance company, or anyone already approved by the IRS to be a trustee of individual retirement arrangements (IRAs) or Archer MSAs. The HSA can be established through a trustee that is different from your health plan provider.

Like IRA's, Regulation E would not apply to HSA accounts.

2. Custodial agreements. An account held under a custodial agreement that qualifies as a trust under the Internal Revenue Code, such as an individual retirement account, is considered to be held under a trust agreement for purposes of Regulation E.

That said, VISA/Mastercard rules would still apply when it comes to disputes/claims.

Randy and Adam - Thank you both for your responses!

As always, I very much appreciate all of the help I receive here in the forums! (I know some days it seems like I need a lot of help) 😂

I hope both of you have a very Merry Christmas!