Our HSA bank says we are not eligible to receive a 1099-SA, but we paid ALL our medical expenses with HSA funds. How do I handle this?

[Della_D]

We have an HSA that the employer contributes some funds to, and we contribute most funds to. Last year, we used every penny in the HSA to pay our significant medical expenses. The HSA bank did not send us a 1099-SA. We logged in to see if we could get one, and their site says that our account is not eligible for a 1099-SA.

TurboTax asks, did we use HSA funds to pay medical expenses, we say yes. Then it asks for the info from the 1099-SA, and won't move forward without it. We're kind of stuck. The only way to get around this is to say that we did NOT use HSA funds to pay medical expenses, which would be inaccurate.

The only thing I can think of is that we did not pay the expenses ourselves and request a reimbursement, we paid the expenses directly out of the HSA using the provided debit card.  Can someone explain this?

[dmertz]

Contact the HSA bank to find out why they have failed to issue that 2018 Form 1099-SA that they are required to have issued if any funds were distributed from the HSA in 2018.

Did you use a different debit card than the one associated with this HSA?  If so, the money would not have come out of this HSA but would have instead come from some other account unless there is a problem with your account at the HSA bank.

[Della_D]

The debit card was issued solely to pay medical bills out of this HSA. However, I'm wondering whether there is some sort of tax-code distinction between "paying the bills straight out of the HSA" and "funds being distributed", ie, me paying the bills and then getting the HSA funds paid out as a reimbursement.

[dmertz]

There is no distinction between paying the bills straight out of the HSA and funds being distributed.  Regardless of how the money comes out of the HSA, money that left the HSA in 2018 is required by law to have been reported by the HSA bank on a 2018 Form 1099-SA.

[Della_D]

Thank you. Clearly we will need to talk to them about this. I appreciate your help.