[JessicaKlements]

How should HSAs be disclosed? Are they truly a savings account that is subject to transaction limitations? We are seeing inconsistencies with how HSAs are disclosed and coded – Checking vs. Savings. I cannot find anything that is specific as to if HSA accounts fall under Regulation DD rules.

Any feedback and help on this is appreciated.

[rcooper]

It is my understanding that HSA type/status will be determined with how you have them set up on your system. I believe many banks use DDA or NOW accounts rather than coding them as savings accounts due the limitations.

Let’s see if we can get a discussion going with bankers who offer HSAs.

[scottpcarr]

Under the Internal Revenue Code (https://www.irs.gov/pub/irs-pdf/p969.pdf), Health Savings Accounts are “a tax-exempt trust or custodial account you set-up with a qualified trustee to pay or reimburse certain medical expenses incurred.” With that being said, most banks have set-up health savings account under a demand deposit account because of the transaction restrictions under a “savings account” when the trustee utilizes a debit card to pay for covered expenses. So you will want to provide the appropriate disclosures for the health savings account made available by the documentation provider and make sure you review these disclosures to ensure compliance with the Truth in Savings Act and its implementing Regulation DD. With this all being said, make sure the product complies with TISA and Reg. DD and do not really worry about the term “savings” in the IRS’ terminology.

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