Leitch v. Christians, No. 13-6009 (8th Cir. 2013)
Annotate this CaseDebtor appealed a bankruptcy court order holding that the funds in his health savings account (HSA) were not excluded from the bankruptcy estate pursuant to 11 U.S.C. 541(b)(7)(A)(ii) and were not exempt. The bankruptcy appellate panel (BAP) held that an HSA was not a health insurance plan regulated by state law and, therefore, the HSA was not excluded from the bankruptcy estate by section 541(b)(7)(A)(ii). The BAP also concluded that section 522(d)(10)(C) and (11)(D) exemptions did not apply in this instance where the funds in the HSA could be used for purposes other than "disability, illness, or unemployment" and also could be used for purposes other than "personal bodily injury." Further, these exemptions applied only to a debtor's "right to receive" the stated benefits but, in this instance, debtor had already received the money from his employer and there was no longer a "right to receive" the funds that are already in the account. Accordingly, the BAP affirmed the judgment of the bankruptcy court.
Court Description: Bankruptcy Appellate Panel. Bankruptcy court did not err in finding the funds in debtor's health saving account were not excluded from the bankruptcy estate pursuant to 11 U.S.C. Sec. 541(b)(7)(A)(ii) and are not exempt pursuant to 11 U.S.C. Sec. 522(d)(10)(C) and (11)(E). [ July 15, 2013
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