How to handle Health Savings Accounts

I would like suggestions on how to handle Health Savings Accounts in YNAB.  

  1. I contribute to the HSA twice monthly.
  2. Money in the account must be used only for qualified medical expenses. 
  3. When I spend on a medical event (e.g. doctor appointment), that expenses is recorded in a credit card account, for example.  What category should I assign?
  4. Some days/weeks later I am reimbursed for that medical expense from the HSA account.
  5. I supposed I could not track the HSA balance in YNAB, and just let the spending and reimbursements negate each other (assuming I use the same budget category for both).  But, I would like to see my HSA balance in YNAB, hence want to track it in YNAB.

Thanks for suggestions.

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  • You could make it an off budget tracking account and when you get the reimbursements it becomes an Inflow To Be Budgeted and then you could assign as you like or it can be inflowed directed to a medical category. The expenses themselves could be recorded to various qualifying categories: Doctor Visits, Tests, Prescriptions, Dental, etc. With it being a tracking account, you don't have to worry about syncing up category balances to account balances which is a pain. But you will have to either a) prefund the medical categories so that when you pay on your credit card your category balances don't go negative or b) understand that if you don't prefund the categories, YNAB will automatically turn the negative medical category into credit card debt and you'll need to use the HSA reimbursements to fund the credit card payment category.

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  • Hey  J Phillips , this is a great question!

    I used to have an HSA and a corresponding debit card, so my setup was slightly easier, but maybe the principles could still apply. 

    My set up was to add the HSA account as an on-budget account, which held the balance, and added a corresponding "HSA Medical" budget category. Most of my spending was from the HSA card, so that made transactions simple. I added an outflow to my HSA account and assigned it to my HSA Medical category. 

    In the rare instance I had a qualifying expense that I paid for with my credit card, I would enter the transaction into my credit card account, assign it to the HSA Medical category. Then, when the reimbursement was received, I would transfer money from my HSA account to my checking, and then I'd budget those dollars to my credit card payment category. 

    As for contributions, I would transfer money from my checking to the HSA account, making sure to adjust the HSA Medical category accordingly so the category available amount was matching. 

    Hope that helps and gives you some ideas!

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  • I struggle with this same issue. I try to pay all bills with a credit card to get the points, especially if we go out of network, then reimburse myself. It's a pain to try to synch up a "medical" category expense with an in flow reimbursement. That's probably best if you can manage it. But I just use the reimbursed in flow as "inflow to budget" and use it as I need to against all budget items. Maybe not so kosher per YNAB rules, but easier. For ex, I have to buy 4 new tires as winter approaches. I don't really have $650 budget money. So I am reimbursing myself approx that amount against HSA expenses we paid ourselves and will use that reimbursement towards these new tires. I can hear Jessie yelling at me. Oh well. 

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    • Hi JBCampo !

      Don't forget Rule Three: Roll With the Punches. :)

      Some times, things happen - emergencies come up, a new set of tires is needed, we've all had things go slightly less magically than planned. Using that reimbursement isn't the worst thing that could happen - just make sure you fund your credit card category to pay off that balance as soon as you can. :)

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      • JBCampo
      • jbcampo
      • 2 yrs ago
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      Faness  Thanks for the kind words. I do pay off the credit card in full monthly, no matter what. When the CC company wants to charge 12% interest, while the online bank pays only 2% interest on savings, I draw down from the buffer if needed. take care.

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    • JBCampo It sounds like you are definitely ahead of the curve, which is great! So don't be too hard on yourself (Jesse wouldn't yell at you, honest! ;) ). I hope your new tires serve you well! :)

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  •  Dan , I'd like to follow your workflow but I have a question. You said "Then, when the reimbursement was received, I would transfer money from my [on budget] HSA account to my checking, and then I'd budget those dollars to my credit card payment category." How can you do that with a transfer since it says "No category needed" so you can't specify a category? I must be missing something. Thanks

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    • Hi Craig M !

      Sorry, this got a bit confusing! When you enter the HSA transaction on your credit card, that transaction will ask for a category and you can select the HSA Medical category. If you have the money in the HSA Medical account, YNAB will move the funds to the credit card category for you, so there's no need to budget funds towards the credit card payment category.

      You will still need to transfer funds from the HSA account to your checking account. That way, when you pay your credit card using your checking account, the HSA funds are there to cover the expense.

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  • I came on the support forum due to this same thing, so therefore I am necroing the thread. Since the YNAB app doesn't support categorized inflow (which is probably my greatest critique of the app) but something you can do is just have a separate budget which handles your Medical expenses. It makes it tough when the HSA runs out, but just another option.

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    • Blue Trumpet The best way to "categorize" your inflows in YNAB is through Payee name. They'll show up on your Income v Expense report separated by payee. Perhaps that will work for you?

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