IRS ISSUES GUIDANCE ON HEALTH SAVINGS ACCOUNT (HSA) ISSUES
IRS Notice 2008-59 contains 42 questions and answers on a variety of HSA issues, including those relating to establishing, contributing to or making distributions from an HSA. It also addresses the requirements of a high deductible health plan (“HDHP”). Because no HSA regulations have been issued, this IRS notice provides important guidance to employers and administrators.
Among the interesting issues addressed by the notice are the following examples of “other health coverage” that will make individuals ineligible for HSA contributions:
- A “mini-med” plan providing anything more than a per diem for hospitalization or a fixed payment for a specific disease. For example, a fixed payment for office visits is a disqualifying benefit. Mini-med plans may be found in accident, disability and specific disease policies.
- A post-deductible health FSA or an HRA that reimburses expenses of family members not covered by the HDHP [that are incurred] before the minimum family deductible under the HDHP is satisfied.
- An employer on-site medical clinic that provides “significant” medical care for less than fair market value.
Employers who contribute to employee HSAs or permit employees to contribute to HSAs through their cafeteria plans should review their other health-related benefit plans and programs to be sure they do not disqualify their employees from participating in an HSA.
View IRS Notice 2008-59
If you have questions about HSAs, HDHPs or permitted “other health coverage,” please contact a member of Oppenheimer’s Employee Benefits Group.
This alert is a copyrighted publication produced by Oppenheimer Wolff & Donnelly LLP. The information contained in this alert is of a general nature and is subject to change. Readers should not act without further inquiry and/or consultation with legal counsel.