Question about establishment of individual HSA accounts

[Guest lmandrew]

A client just added a HDHP with individuals HSAs. However, the HSA provider has not yet set up the individual accounts. If the accounts are not set up by 1/31, does this mean that the HSA can't reimburse expenses from January, since the account won't be set up until February?

[JDuns]

No expenses incurred before the accounts are opened may be reimbursed by the HSA on a tax-free basis.

If the account is opened by the provider on February 10, the employee may take a distribution to pay for medical expenses incurred prior to that date (including expenses incurred in 2004 or earlier) but would have to include the distribution in their taxable income. Only medical expenses incurred on or after Feb. 10 in my example would be entitled to be reimbused tax-free.

[Guest lmandrew]

Thanks for your help. I have been waiting on the HSA hotline for a callback on this issue for several days!