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Health Saving Accounts
Treasury Department and Internal Revenue Service Issue Health Savings Account Guidance
On December 22, 2003, the U.S. Treasury Department and the Internal Revenue Service (IRS) issued guidance on health savings accounts (HSA's) that were created by the Medicare bill signed by President Bush on December 8. This guidance is the form of IRS Notice 2004-2.
The notice is in a question-and-answer format and provides information on what HSA's are, who can participate in them and how they operate. This guidance also clarifies several issues with HSA's, among them employer contributions to an HSA are not subject to FICA taxes, HSA's and self-insured high deductible health plans (HDHP's) and rules for determining the deductible for family coverage.
Additional HSA guidance is expected in 2004.