BISYS to Provide HSA Documents

February 9, 2004 ( - Outsourcing provider BISYS is now providing customized documentation for financial organizations serving as trustees for Health Service Accounts.

HSAs are tax-favored savings arrangements for those covered by high-deductible health insurance plans, allowing tax-deductible contributions and tax-free distribution of basis and earnings if distributed amounts are used for qualified medical expenses.

According to the BISYS announcement, there is no limit on the number of HSAs that can be established, participants are not required to be self-employed or employed by small employers, and there is no termination date for the HSA program.

Distributions for qualified medical expenses are exempt from federal income tax and penalties, while distributions for nonqualified medical expenses are taxable and potentially subject to a 10%-early distribution penalty – the BISYS announcement said.