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NEW HSA GUIDANCE RELEASED BY TREASURY

On June 25, 2008, according to HSA Bank, the Treasury Department and Internal Revenue Service released new guidance for health savings accounts (HSAs). The guidance is comprised of 42 questions. It covers many different topics, including: eligible individuals, high deductible health plans, contributions, distributions, prohibited transactions, establishing an HSA, and administration.

  • Health FSA and HRA Plans Several questions and answers are provided regarding an individual's eligibility when a health FSA or HRA plan is also providing coverage.
  • Veterans Affairs Benefits A frequently asked question of HSA Bank, Notice 2008-59 identifies that an individual is eligible for an HSA even if he/she receives permitted coverage or preventive care benefits through the Department of Veteran Affairs (VA). However, individuals that receive medical benefits through the VA in the past three months are generally not eligible for an HSA.
  • Employer Recoupment of Contributions An employer can recoup contributions it makes to an employee's HSA only if the employee was never an eligible individual or the employer made contributions in excess of the maximum annual contribution amount. If the recoupment is being requested due to the latter, only the amount that is in excess may be recouped.
  • HSA Establishment Notice 2008-59 affirms the establishment of an HSA is based upon state law for establishment of a trust.
  • Distributions for Medicare Premiums Medicare Part D premiums for the account holder, the account holder's spouse, or the account holder's dependents are a qualified medical expense so long as the account holder has attained age 65. However, Medicare premiums are not considered a qualified medical expense if the account holder has not attained age 65, even if the account holder's spouse has attained age 65.

To download Notice 2008-59, please click here.