Are there any tax consequences to pledging the HSA as a security for a loan?
Any portion of the HSA that an individual accountholder pledges as security for a loan will be treated as a prohibitive transaction. If an account holder engages in a prohibitive transaction with his or her HSA, the account will be disqualified. Thus, the HSA stops being an HSA as of the first day of the taxable year of the prohibited transaction. The assets of the HSA are deemed distributed, and the appropriate taxes, including the 20 percent additional tax for distributions not used for qualified medical expenses will apply.