Providing Answers to Lingering Questions on HSAs and HDHPs

On June 25th, the Treasury Department and the Internal Revenue Service released Notice 2008-59, which provides employers and employees with a new set of formal questions and answers on Health Savings Accounts (HSAs) and High Deductible Health Plans, a central component of consumer driven health care.

Notice 2008-59 contains over 40 new frequently asked questions and answers that cover a wide range of topics, including:

• Who is an Eligible Individual;
•  Issues related to High Deductible Health Plans;
• Contributions to HSAs;
• Distributions from HSAs; and
• Establishing an HSA

Among their “grab bag” of questions and answers, the IRS has clarified that employees recieiving free or employer-subsidized health care on-site medical clinics generally should not lose eligibility to participate a High Deductible Health Plan/HSA provided that the clinic does not provide “significant medical services.” A concern had previously been raised that such employer benefits as on site clinic could be interpreted as low/no cost sharing benefits that fall outside of HDHP requirements.

The full notice is available at http://www.treas.gov/press/releases/reports/notice200859.pdf