HSAs Overdrafts and Reg E

Posted By: BTO

HSAs Overdrafts and Reg E - 03/04/11 07:36 PM

I have a couple of questions involving HSAs.
First in terms of the new Reg E Changes how are HSAs to be treated. I think they should be Exempt but can they also be Opted-In?
Also, we have checking accounts that act as a "suspense" accounts for our HSA accounts when they are accessed by check or debit card. We have had a situation recently where that HSA checking account was overdrafted. Can we charge OD and NSF fees to this checking account or is that still considered part of the HSA?

Thanks!
Posted By: rlcarey

Re: HSAs Overdrafts and Reg E - 03/04/11 07:42 PM

The payment of any overdraft on an HSA account is a prohibited transaction.

How you collect and charge for any overdrafts would be outside of the HSA account and would most likely have to be covered by your account agreements.
Posted By: BTO

Re: HSAs Overdrafts and Reg E - 03/07/11 04:53 PM

What if the Account that is Overdraft is the Checking Suspense Account and not the actual HSA, do the same rules apply?
Posted By: rlcarey

Re: HSAs Overdrafts and Reg E - 03/08/11 12:12 AM

I have never heard of a Checking Suspense Account attached to an HSA so I can't answer your question. Sounds like you may have a cobbled together program if you have to run transactions through multiple accounts to post transactions. Do your agreements cover this process? What is the base account? A savings account? If so and you are eventually posting checks and debit card transactions to the savings account by running them first through a shadow checking account, you most likely are going to run afoul of the Reg. D savings account transaction limitations.