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Health Saving Accounts
Treasury Department and Internal Revenue Service Provide Transitional Relief for High Deductible Health Plans Providing State-Mandated Care with a Low or No Deductible - 06/21/2004
On June 21, 2004, the U.S. Treasury Department and the Internal Revenue Service (IRS) issued guidance which provides transitional relief to health plans which do not qualify as High Deductible Health Plans (HDHP) due to state-mandated benefits which are offered at a low or no deductible (and are not covered by IRS Notice 2004-23 dealing with preventive care).
This guidance, in the form of IRS Notice 2004-43, provides that a health plan that fails to qualify as an HDHP because it provides state mandated benefits (in effect January 1, 2004) with a low or no deductible will be treated as an HDHP until January 1, 2006. This will allow individuals in such plans to take participate in a Health Savings Account (HSA).
Additional HSA guidance is expected this month (June, 2004).