Hsa reimbursement

[Jade]

I paid for a doctor's visit and medication with my hsa debit card in 2017 and  a few months later in I 2017 received a check from drug savings program.  I did not deposit it back into my hsa as I had surgery later that year and did not use my hsa for the hospital expenses I paid.  I have more than enough medical expenses that year that I did not use the hsa for.  Can I use these expenses to offset the check I received from the drug savings program or ?  

[Opus 17]

Can you clarify this is all in 2017?  Are you preparing your 2017 return late?  Or did some of these events occur in 2018?

[Jade]

Yes this was in 2017. I had forgotten about the drug savings card. It wasn’t cash but a debit card that was to be used for doctor, dentist, etc. I did have a lot of other medical expenses in 2017 that I did not use my hsa for. Just need to know if I need to amend 2017 for the small amount or I can use the other medical expenses to offset it?

[Jade]

Yes this was all in 2017. I had forgotten about it and as I started 2018 taxes I remembered it. It wasn’t a check I received but a debit card that had to be used for doctor, dentist, etc. It was not a large amount. I’m just not sure if I need to amend 2017 as I had a lot of medical expenses in 2017 that I did not use my hsa and wondering if I can use those expenses to offset the savings card that I got?

[Opus 17]

If you "used up" the amount of the refund through other medical expenses that were not covered by insurance or reimbursed from the HSA, then you don't need to make any tax adjustments.  As long as the amount you withdrew from the HSA is equal or less than your out of pocket expenses, you are fine.  You don't have to match expenses 1 to 1.

[Jade]

Thank you.

[Jade]

Does it matter that I used the hsa debit card to pay for the medication and doctor visit?

[Opus 17]

No. It doesn’t matter how you got the reimbursement.

[Jade]

I guess what I mean by all of these questions is it okay to use my unreimbursed medical expenses to offset the rebate the drug company even though I originally paid for the doctor visit and the drug he administered with my hsa debit card?

[Opus 17]

I think you are attaching too much significance to the particular payment method. As long as this all happened in 2017, then, if your out of pocket expenses are equal to or more than your withdrawals from your HSA, you are in compliance. It doesn't matter how you paid the out of pocket expenses, and it doesn't matter how you accessed the HSA funds.