health savings account

[David T.]

RE: Equity vs. Asset
I don't know; as I noted in the email, I am not an accountant. When I set up my FSAs, I spent a lot of time with help from others on this list, and that's where these accounts ended.

RE: Liability or not
My understanding of HSA/FSA accounts is that you the contributor agree at the start of the year that you are going to pay a certain dollar amount into the account, which you expect to use during that year for qualifying expenses. On each paycheck then, you are automatically charged for a portion of the amount you committed to pay. Unless you have some life-changing (defined by the IRS) event, you still have to pay this amount over the year. Even though it hasn't been taken yet, it will be. Therefore, you are liable for the amount you said you were going to pay. To me, that's a liability.

Or, maybe you have some different kind of HSA than I ever have had. If so, then you're luckier than I am.

David



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From: FireFly <fireflys_98 at yahoo.com>
To: David T. <sunfish62 at yahoo.com>; Richard Bishopp <rbishopp44 at gmail.com>; suk wah bernstein <sukwahbernstein at gmail.com>
Cc: "gnucash-user at gnucash.org" <gnucash-user at gnucash.org>
Sent: Wednesday, October 26, 2011 10:41 PM
Subject: Re: health savings account


From: David T. <sunfish62 at yahoo.com>

Subject: Re: health savings account

>That said, Health Savings Accounts in the US are a complicated thing, and different than US Dependent Care accounts. 
>Generally*, these accounts are considered a Liability, since you agree with some agency (the FSA provider) to contribute 
>a certain amount of money to the account over the year. The liability account balance 
>gets set at the beginning of the year to the dollar
 amount you say your 
>FSA will receive over the year. 

Why would it be an equity account vs an asset? I've always had my FSA setup as an Asset account, and I certainly plan to setup my HSA as an Asset since it really is (it's held at a bank and everything). The liabilty bit gets interesting, for an FSA it totally made sense (to me) since I could use it all Jan 2nd, and slowly repay it over the year, for an HSA (at least with my company) I can't, have to wait until I've got enough in my HSA before I can claim it.
 
- James Duerr

E-mail: FireFlys_98 at yahoo.com
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