Sweetnam: HSA Guidance Is Coming

July 19, 2004 (PLANSPONSOR.com) - Plan sponsors looking for more regulatory guidance on Health Savings Accounts (HSA) may soon get their wish.

Treasury Benefits Tax Counsel Bill Sweetnam said on a conference call organized by the ERISA Industry Committee (ERIC) that the next round of HSA guidance is “peeking around the door,” according toDeloitte’s Global Employer Rewards Washington Bulletin for July 19 th . Sweetnam said the new guidance willanswer a lot of the remaining “nuts and bolts” questions about HSAs –IRA-type health-care accounts that can be established to pay for qualified medical expenses of eligible individuals –and that it will be the last round of HSA guidance the Treasury Department plans to issue in the immediate future.

According to Sweetnam, plan sponsors can expect the guidance to include more details on:

  • what constitutes a “high-deductible health plan” (HDHP)
  • out-of-pocket maximums
  • the definition of preventive care
  • determining maximum contributions to HSAs
  • meeting the comparable contribution requirement
  • qualified and non-qualified distributions
  • rollovers
  • the interaction between IRC section 125 cafeteria plans and HSAs
  • HSA account administration, including appropriate administrative restrictions on HSAs
  • appropriate trustees and custodians for HSAs
  • restrictions on HSA trustee and custodian agreements.

In June, officials at the Treasury Department and the Internal Revenue Service (IRS) released proposed models for trust/custodial agreements for HSAs (See Feds Release Model HSA Documents ). Earlier, t he IRS provided guidance on how an individual may make contributions to an HSA while being covered by a high deductible health plan (HDHP), a Flexible Spending Arrangement (FSA) or a Health Reimbursement Arrangement (HRA) (See IRS Provides HSA Interaction Guidance ).