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Can future year contributions pay for prior year expenses?

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My question is once an HSA has been opened, can I incur medical costs in 2010, but finish paying for them after January 1 with my 2011 contribution?

In October 2008 I enrolled our family in a HDHP. It excludes maternity coverage. I opened an HSA in November 2008. Contributed full amounts for 2008 and 2009. Current balance is approximately $10,000.

I am due with baby #2 in September 2010. I had a C-section last time, so I am budgeting for that again. I plan on making full 2010 contribution when pregnancy is further along. (Budget-wise, if I have a miscarriage, I would prefer not to have over $15,000 locked up in HSA, when otherwise our health expenses are minimal.)

When I deliver I plan on having approximately $16,000 in the HSA. I anticipate maternity charges could be in the area of $20,000. After delivery I plan on using all but $25.00 in HSA account (to keep open and active) to pay the medical bills. If I have $4,000 in medical bills remaining, can I make my 2011 contribution January 1, 2011. Then pay the remaining bills out of my 2011 contribution? It would be nice to use the pre-tax money to pay off the last of the maternity bills.

Thank you for your assistance.

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As long as you are using the money in your HSA for qualified medical expenses, and the charges were incurred after the HSA was established, it doesn't matter when the charges were incurred as compared to when the money was funded into the HSA account.

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As long as you are using the money in your HSA for qualified medical expenses, and the charges were incurred after the HSA was established, it doesn't matter when the charges were incurred as compared to when the money was funded into the HSA account.

Thanks so much for the quick response!

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