Residents Of Some States Get Temporary HSA Relief

The minimum 2004 HSA deductible is $1,000 for individuals and $2,000 for families.

The high-deductible coverage requirements of the HSA section of the act are strict because the authors wanted to give HSA holders a strong financial incentive to hold down health care costs. But the HSA section does let high-deductible plans offer coverage for “preventive care” with a low deductible or no deductible.

The IRS is responsible for deciding what qualifies as preventive care, Tanner writes.

“Several states” now require that health plans provide certain benefits with a low deductible or no deductible, Tanner writes.

Plans that include the state-mandated no-deductible and low-deductible benefits do not qualify as HSA-compatible health plans, but, because the HSA law and the IRS high-deductible plan regulation are so new, “these states have had insufficient time to modify their laws to conform,” Tanner writes. “It is appropriate to provide transition relief.”

The IRS has posted a copy of Notice 2004-43 at //www.irs.gov/pub/irs-drop/n-04-43.pdf

Reproduced from National Underwriter Edition, June 25, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.