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06/13/2017

HSA-Eligibility: Be Careful (article)


A recently released IRS Chief Counsel pronouncement provides an essential reminder about the importance of ensuring that the high deductible health plan (HDHP) used in conjunction with a health savings account (HSA), in fact, meets the requirements of an HSA-compatible HDHP. 

 

As a reminder, an HDHP must meet deductible and out-of-pocket limitation standards.  Following are the indexed limitations for 2017 and 2018:

 

 

Individual/Self Only

Family

2017

2018

2017

2018

HDHP Annual Deductible

 

$1,300

 

$1,350

 

$2,600

 

$2,700

HDHP Annual Out-of-Pocket Limit

 

$6,550

 

$6,650

 

$13,100

 

$13,300

 

Just because a plan meets the deductible and out-of-pocket standards is not assurance that the plan is HSA-compliant.  While the plan can provide certain preventive services prior to meeting the statutory minimum deductible, it cannot provide any other benefit such as coverage of prescription drugs or coverage for all or portion of office visits, by way of example. 

 

Certain other traps could occur with telemedicine or on-site clinics, for example.  If these types of benefit provide reimbursement prior to satisfaction of the minimum statutory deductible, other than permitted preventive services or other permitted benefits such as dental or vision services, the individual would be HSA-ineligible. 

 

While this Chief Counsel pronouncement is not breaking new ground, it is a good reminder of the importance of ensuring an HDHP is, in fact, HSA-compatible.


 

The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.  

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