health savings account

[Robin Chattopadhyay]

On Fri, Oct 28, 2011 at 8:06 AM, Eric Morey <eric at glodime.com> wrote:

> On Thu, 2011-10-27 at 10:27 -0700, David T. wrote:
> > 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.
> >
>
> Interesting. Would you treat a rent or lease contract the same?
>
> I set mine up the same way as an earlier poster -- with both an asset
component and a liability component.


Assets:
 HSA Account
Liabilities:
 HSA Funding

On the first of the year, I debit the HSA Account (asset) and credit the HSA
Funding (liability). This gives me the full available balance for what I
will be able to spend from the HSA Account. Each paycheck debits the HSA
Funding account for that period's contribution.

This seems to fit the model from Accounting 101 as "pre-paid income" because
the employer essentially advances you the entire year's contribution on Jan.
1. So, for a rent or lease contract where I spent/received payment that was
meant to cover several accounting periods, then, yes, I would do the same.