IRS Provides Guidance on HSAs for Users of Indian Health Service

February 1, 2012 ( – The Internal Revenue Service issued guidance about whether individuals who are eligible for services at an Indian Health Services (IHS) facility are also eligible individuals for purposes of contributing to a health savings account (HSA).

Notice 2012-14 says an individual who is eligible to receive medical services at an IHS facility, but who has not actually received such services during the previous three months, is an eligible individual within the meaning of § 223(c)(1) of the Internal Revenue Code who may establish and make tax-free contributions to an HSA. However, an individual generally is not an eligible individual if the individual has received medical services at an IHS facility at any time during the previous three months.   

Notice 2004-2, Q&A-6, provides that the receipt of permitted coverage, such as dental and vision care, or the receipt of preventive care, such as well-baby visits, immunizations, weight-loss and tobacco cessation programs, does not affect an individual’s eligibility.  

Section 223(c)(1) provides that an eligible individual means, for any month, an individual who is covered by a high deductible health plan (HDHP) on the first day of such month and, generally, is not covered by any other health plan, with certain exceptions. In addition, an eligible individual cannot be claimed as a tax dependent on another person’s tax return and cannot be enrolled in Medicare.   

IHS is a division within the U.S. Department of Health and Human Services. An IHS facility means a facility operated directly by IHS, or by a tribe or tribal organization under the Indian Self-Determination and Education Assistance Act.  

Notice 2012-14 will be published in the Internal Revenue Bulletin 2012-8 dated February 21, 2012. Text of the Notice is available at