HSA Receipt Documentation

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FinanceGrad
Posts: 10
Joined: Sat Sep 13, 2014 11:17 pm

HSA Receipt Documentation

Post by FinanceGrad »

Hi all,

I have had some medical bills, and am wondering what documentation is sufficient for current (or future) HSA distributions. I received an EOB like this (http://www.bcbs.com/report-healthcare-f ... efits.html). According to this web site (http://www.mycafeteriaplan.com/employee ... t-example/) that should be sufficient as a receipt, except that is does not show that I paid the bill.

How do others here retain documentation of paid medical bills for future HSA withdrawals? Am I thinking I will save my EOB and also save the credit card statement that shows that I paid this bill. Is this sufficient documentation for me to use in 1, 10, or 30 years when I choose to withdraw HSA funds?

Thanks!
texasdiver
Posts: 3937
Joined: Thu Jun 25, 2009 12:50 am
Location: Vancouver WA

Re: HSA Receipt Documentation

Post by texasdiver »

I'm not sure anyone actually knows for certain. You don't actually ever show the receipts to anyone unless you are audited. You just keep them in case you ever are.

Myself, I'm doing the same thing as you. What I do is the following:

1. Keep all major EOB statements. I discard the ones that are for trivial amounts like a $5 prescription co-pay.
2. Print an annual summary of out of pocket spending from my insurance web site. It allows me to do this and creates a nice table showing how much out of pocket expenses we had for each family member covered by the HD insurance plan
3. Keep all major medical and dental bills on which I write the date paid and the credit card used to pay (I pay them all online so don't really get paper receipts.
4. Keep all credit card statements which could be cross referenced against the bills and EOB statements if necessary.

I'm guessing this is actually much better documentation than the actual receipts which are often just credit card print-outs that don't provide any specificity as to what the payment was for.

By the way, I had a cafeteria plan for years which was administered by a 3rd party (as I think they mostly are). They always accepted EOB statements as adequate documentation and never asked for actual receipts so that seems to be the customary way of dealing with this issue. I know that cafeteria plans and HSAs are different animals but the same basic principal applies I think. If it ever came to it, I think one could reasonably argue that using EOB statements is widely accepted practice.
Spirit Rider
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Re: HSA Receipt Documentation

Post by Spirit Rider »

I have been able to get a receipt for any qualified medical expense. This takes the form of in person receipts, mailed receipts or statements showing payments, online receipts, or emailed receipts.

You need to be able to prove that the expense is qualified and paid. The EOB and a highly correlated and identifiable credit card statement entry might be acceptable for a few entries. When it comes to the IRS, I always like to err on the side of more documentation. So I would try to do so.
Beth*
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Re: HSA Receipt Documentation

Post by Beth* »

I throw everything in a file folder including the Explanation of Benefits and the receipt from the doctor or hospital showing that I paid all other expenses in full. Every medical professional I have ever dealt with has provided a receipt for payment so that can be matched against the EOB to show the payment was made. My file is somewhat disorganized but everything is there and if I ever got audited I could sit down and organize it. It would probably make sense to scan this information rather than keeping paper copies but that would take more time and throwing everything in the file is simply easier.
furwut
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Joined: Tue Jun 05, 2012 8:54 pm

Re: HSA Receipt Documentation

Post by furwut »

I've just been using the EOB or medical providers invoice. I scan them and attach the image to a cloud document storage provided by my HSA.

Should I switch HSA custodians I will need to export everything. Only have had an HSA for a year so haven't added too much.
kaneohe
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Joined: Mon Sep 22, 2008 12:38 pm

Re: HSA Receipt Documentation

Post by kaneohe »

You may also have to demonstrate that you never used these expenses as medical deductions on your tax returns so you will also have to keep all tax returns and supporting documents if you did take medical deductions (to show that they were different expenses than the HSA).
desiderium
Posts: 1264
Joined: Sat Jan 04, 2014 10:08 am

Re: HSA Receipt Documentation

Post by desiderium »

Beth* wrote:I throw everything in a file folder including the Explanation of Benefits and the receipt from the doctor or hospital showing that I paid all other expenses in full. Every medical professional I have ever dealt with has provided a receipt for payment so that can be matched against the EOB to show the payment was made. My file is somewhat disorganized but everything is there and if I ever got audited I could sit down and organize it. It would probably make sense to scan this information rather than keeping paper copies but that would take more time and throwing everything in the file is simply easier.
I do this each year, and at the end of the year I add up a total and scan the mess into a PDF document, where the name includes the amount. The paper is then recycled.
jebmke
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Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: HSA Receipt Documentation

Post by jebmke »

texasdiver wrote:I'm not sure anyone actually knows for certain. You don't actually ever show the receipts to anyone unless you are audited. You just keep them in case you ever are.
This is probably as close as it gets. I was audited (examined is probably the operative word) two years in a row. Once for Schedule A and the second year for Schedule A and Form 8889. The examination letter requested all documents supporting all entries on each form. I am not sure why they added 8889 the second year -- I know why my Schedule As were targeted. I asked a friend who is a retired agent with the service about the request and he said that once they trigger a question on a form like Schedule A, they make a sweeping request for the whole schedule - particularly with Schedules like A, C and E where there are potential for fraud.

For 8889 I provided the 5498s and copies of the checks to document the deposits and the 1099SA along with a spreadsheet reconciling the distribution and copies of receipts for all items on the spreadsheet. They did not ask to prove these had not been used elsewhere (note, they could tell they had never been deducted since we never take medical deductions on Schedule A.)
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
Spirit Rider
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Re: HSA Receipt Documentation

Post by Spirit Rider »

furwut wrote:I've just been using the EOB or medical providers invoice. I scan them and attach the image to a cloud document storage provided by my HSA.

Should I switch HSA custodians I will need to export everything. Only have had an HSA for a year so haven't added too much.
An EOB or invoice are not evidence of an expense. Only proof of payment does that. I do not know of, or heard of anyone who was asked to justify HSA withdrawals for qualified medical expenses yet.

However, I think you are risking future IRS denial, especially if you are following the model of paying current expense out of pocket. HSA accounts are only a decade old and many people are newer than even that. When people start having exceptionally large qualified withdrawals, the IRS might take notice.

Why take the risk?
skylar
Posts: 314
Joined: Sat Oct 04, 2008 11:28 am

Re: HSA Receipt Documentation

Post by skylar »

Spirit Rider wrote: An EOB or invoice are not evidence of an expense. Only proof of payment does that. I do not know of, or heard of anyone who was asked to justify HSA withdrawals for qualified medical expenses yet.

However, I think you are risking future IRS denial, especially if you are following the model of paying current expense out of pocket. HSA accounts are only a decade old and many people are newer than even that. When people start having exceptionally large qualified withdrawals, the IRS might take notice.

Why take the risk?
What exactly counts as proof-of-payment? Does this mean we should be saving credit card statements as well, and tying specific charges back to specific EOBs/invoices?
jebmke
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Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: HSA Receipt Documentation

Post by jebmke »

Spirit Rider wrote:I do not know of, or heard of anyone who was asked to justify HSA withdrawals for qualified medical expenses yet.
Me. I posted right before you.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
furwut
Posts: 2123
Joined: Tue Jun 05, 2012 8:54 pm

Re: HSA Receipt Documentation

Post by furwut »

Why take the risk?
For some of my major expenses last year I know I have the credit card receipt scanned. I can go back an make sure to add them to my HSA's folder. But if the IRS wants to play nasty they then can ask to see all my health insurance records to make sure I wasn't reimbursed for some or all of the expenses (some of my expenses were dental and not insured). So the record keeping can get very onerous. Add to that how easy it would be to photoshop any supporting documentation.

Maybe the best way is to just throw everything medical related into a bucket and hope you are never audited - but if you are there's a reasonable amount of documentation to be had provided you have the patience to piece it all back together.
jebmke
Posts: 25474
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: HSA Receipt Documentation

Post by jebmke »

furwut wrote:Maybe the best way is to just throw everything medical related into a bucket and hope you are never audited - but if you are there's a reasonable amount of documentation to be had provided you have the patience to piece it all back together.
I do one reimbursement per year. Simple spreadsheet that reconciles to the entry on the 8889. It isn't that hard to consolidate receipts. Most pharmacies provide annual reports on what you paid. I can get ours online. A couple of our regular docs also provide an annual statement on request (talk to the billing person, not the medical people!). It isn't that hard. I have chosen to reimburse every year. I didn't want years worth of reimbursements to process when I am feeble (or for my wife to process after I croak -- she'd kill me if I left a lot of work for her to do).

Note, IMO unless the IRS really suspects fraud, I think they are fine with invoices instead of proof of payment. If it were something large it might be worth keeping copies of checks or CC statements). They were fine with copies of my invoices.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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