Employers can offer employee assistance programs and disease-management programs along with health savings account programs.
Shoshanna Tanner, an official at the Internal Revenue Service, comes to that conclusion in a new guidance that answers 88 common questions about the HSA program.
The section of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 that created HSAs requires HSA holders to combine the accounts with high-deductible health insurance coverage. But the requirement for a high deductible applies only to coverage for treatment of a health problem. HSA-compatible health insurance can cover preventive care services such as well-baby visits with a low deductible or no deductible.
Some employers and benefits consultants had wondered about the status of EAPs, wellness programs and disease management programs.
The IRS might find that such a program provides significant medical care benefits, but, in most cases, the programs probably are HSA-compatible, Tanner says in the guidance.
One example Tanner describes is an EAP that offers a few free counseling sessions to help employees cope with concerns that might affect job performance. When appropriate, counselors refer EAP members to outside resources. Although the EAP provides a few counseling sessions, it is HSA-compatible “because it does not provide significant benefits in the nature of medical care or treatment,” Tanner says.
Another section of the guidance holds that employees can repay mistaken HSA distributions without paying penalties or taxes.
The guidance also discusses many other HSA topics, such as individual eligibility rules and computation of taxes.
The National Association of Health Underwriters, Arlington, Va., has issued a statement praising the guidance and predicting that it will encourage insurers and agents to sell HSA plans.
“We see this type of plan becoming a mainstream option in a very short period of time,” Janet Trautwein, NAHUs vice president of government affairs, says in the statement.
Reproduced from National Underwriter Edition, July 29, 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.