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.

Introducing UMB HSA Saver

UMB HSA Saver is a unique investment platform designed with ease in mind. Account holders can easily research, buy and sell funds with a couple clicks.

How to Use ReceiptVault

Easily track and manage your healthcare receipts using ReceiptVault.

HSA FAQ Resource

Find answers to your most common HSA questions in our comprehensive HSA FAQs section.