For your information, IRS has issued its 2017 version of Publication 969, Health Savings Accounts and Other Tax-favored Health Plans. Pub 969 historically is viewed as the IRS “bible” on health savings accounts, flexible spending accounts, and health reimbursement accounts. The Pub can be found at https://www.irs.gov/pub/irs-prior/p969–2016.pdf. We recommend it to you as a valuable reference.
While on this topic, one can only qualify for an HSA if you are covered under a qualified high-deductible health plan and no other coverage that is not HDHP. Permitted “other coverages” are….
- Workers compensation
- Liability payments under property insurance, such as auto or homeowners
- Specific disease policies
- Fixed amount per day hospital indemnity
- Accident policies
- Disability income policies
- Dental
- Vision
- Long-term care insurance
- A limited-purpose FSA or HRA that reimburses any of the above expenses or is limited to preventive coverage only
- Post-retirement HRA
In general, anything that reimburses qualified medical expenses below the HDHP deductible raises a red flag. IRS has yet to address the effect of telemedicine plans on HSA eligibility. Telemedicine plans provide live phone and/or video consultation with a licensed physician who can render counsel and diagnosis and write prescriptions. An HSA is not an employer-sponsored plan. Rather, it is an employee-owned account. As such, employees are the responsible parties to determine eligibility. If you offer both an HDHP and a telemedicine program, best practices dictate that you should advise employees in writing that to enroll in both may affect their eligibility for an HSA; and they should consult their tax advisor before enrolling in both.
Not everyone is an expert on health care reform. But the folks at J. Smith Lanier, one of our endorsed services providers, are. For this reason they created a publication called the Health Care Reform Alert. J. Smith Lanier has been providing these to its clients since 2010 when the bill was passed and now offers it to the members of ABA. It is J. Smith Lanier’s intention in the alerts to take the many pages generated by the Centers for Medicare and Medicaid Services, U.S. Department of Labor or Treasury and filter them down into terms that all can understand. For more information on how J. Smith Lanier can help your bank, contact Tom Younger at (256) 890-9027.
