August 25, 2019

Colorado Court of Appeals: Health Savings Account Not Exempt From Garnishment

The Colorado Court of Appeals issued its opinion in Commercial Research LLC v. Roup on Thursday, December 5, 2013.

Garnishment—Health Savings Account—Retirement Plan—Exemption.

Gary S. Roup appealed the trial court’s order denying his claim of garnishment exemption in favor of Commercial Research, LLC (creditor). The order was affirmed.

Creditor obtained an assignment of a default judgment that had been entered against Roup in a Texas court. Creditor then filed the judgment in Colorado and began collection proceedings against Roup’s assets, including $3,729 held in a health savings account (HSA).

On appeal, Roup contended that his HSA is a “retirement plan” and therefore exempt from garnishment under CRS § 13-54-102(1)(s). An HSA is not intended to replace income lost as a result of retirement; it is intended to cover medical costs incurred at any point during an individual’s lifetime. Therefore an HSA is not a “retirement plan” and is not exempt from garnishment.

Summary and full case available here.

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