J&D Benefits Perspective

2010 HSA and HDHP Limits

Contribution limits for Health Savings Accounts (HSAs) and deductible and out-of-pocket expense limits for HSA-qualified High Deductible Health Plans (HDHPs) will change effective January 1, 2010.

Annual Dollar Limit	2009	2010
Maximum HSA Contribution - Individual	$3,000	$3,050
Maximum HSA Contribution - Family	$5,950	$6,150
Maximum HDHP Deductible - Individual	$1,150	$1,200
Maximum HDHP Deductible - Family	$2,300	$2,400
Maximum HDHP Out-of-Pocket Expense - Individual	$5,800	$5,950
Maximum HDHP Out-of-Pocket Expense - Family	$11,600	$11,900

Contact your Johnson & Dugan Account Executive for details about HSA plans. For additional information about Health Savings Accounts, including answers to frequently asked questions, related IRS forms and publications, technical guidance, and links to other helpful web sites, see the Treasury Department website: http://www.treas.gov/offices/public-affairs/hsa/

2009 HSA and HDHP Limits

Contribution limits for Health Savings Accounts (HSAs) and deductible and out-of-pocket expense limits for HSA-qualified High Deductible Health Plans (HDHPs) will change effective January 1, 2009.

2009 HSA:

• $3,000 maximum contribution individual self-only HDHP coverage ($2,900 in 2008)
• $5,950 maximum contribution family HDHP coverage ($5,800 in 2008)
• Catch-up contribution is $1000 for individuals age 55 or older ($900 in 2008)

2009 HDHP:

    * $1,150 minimum annual deductible self-only HDHP coverage ($1,100 in 2008)
    * $2,300 minimum annual deductible family HDHP coverage ($2,200 in 2008)
    * $5,800 maximum annual out-of-pocket expense self-only HDHP coverage ($5,600 in 2008)
    * $11,600 maximum annual out-of-pocket expense family HDHP coverage ($11,200 in 2008)

Contact your Johnson & Dugan Account Executive for details about HSA plans. For additional information about Health Savings Accounts, including answers to frequently asked questions, related IRS forms and publications, technical guidance, and links to other helpful web sites, see the Treasury Department website: http://www.treas.gov/offices/public-affairs/hsa/

Tax Status Of HSAs In California Is Complicated

Pender, Kathleen. "State Rules Complicate Health Savings Accounts." San Francisco Chronicle 28 Nov. 2004

The State of California is making HSA accounting complicated and will deter many employers and employees from adopting the accounts. Kathleen Pender's article outlines the many complications taxpayers will face if they participate in an HSA account. Download Pender_HSA.pdf

Excellent Legal Interpretation Of Recent Guidance

"A Summer Tsunami Of HSA Guidance (But Will Employers Be Interested)." Kilpatrick Stockton LLP July 2004. Path: Legal Alerts: Employee Benefits.

This article touches on a number of significant negatives to the HSA approach employers should consider before offering the account to employees.

Click Here To Download The Kilpatrick Stockton Document

HSA Guidance Released!

After a month of delays, the expected “June” Health Savings Account Guidance was released today. The 30 page IRS Notice 2004-50 is in the form of 88 Questions and Answers

HSA Treasury Announcement

Specific HSA Notice

While a formal IRS notice does not have the authority of a proposed regulation, this guidance has been reviewed at the White House and is clearly a strong indication of their interest in promoting Health Savings Accounts.

Critics, Supporters Debate Effects of Health Savings Accounts

Rosenblatt, B. (2004, July 12). Critics, Supporters Debate Effects of Health Savings Accounts
[Editorial]. California Healthline. Retrieved July 21, 2004, from California Healthcare Foundation Website:
Click For Article

This article gives a good overview of a few pluses and minuses of HSAs. The author points out California may be the HSA "hotbed" of the nation.

HSAs, FSAs and HRAs

Guidance issued this week from the Treasury Department and IRS describes circumstances under which people may contribute to a health savings account when also covered by a flexible spending account or health reimbursement arrangement.

Tax-deductible contributions to an HSA are allowed for individuals covered under a high-deductible health plan but not simultaneously covered under another health plan that pays for services before the HDHP's deductible is met. According to five interpretation scenarios in Revenue Ruling 2004-45: Download file

* HSA contributions are not allowed when a person is covered by an FSA and/or HRA that pays for medical expenses before the deductible is met.
* Such contributions are permitted, however, when the FSA and/or HRA pays only for certain benefits, such as vision, dental and preventive care.
* If the person agrees to forego HRA payments for a while, HSA contributions are allowed during the suspension period.
* If the FSA and/or HRA pay for medical expenses only after the HDHP deductible is met, HSA contributions are permitted.
* HSA contributions are also okay when HRAs pay only for medical expenses after retirement.

Employers were seeking more flexibility than the ruling permits, observes Linda Bergthold, a health care consultant with Watson Wyatt. "It has not made it easier for them, and they are likely to try to seek some kind of legislative relief," she says.

- benefitnews.com 5/13/04

Health savings accounts may escape ERISA's grip

In a move intended to spur employer adoption of health savings accounts (HSAs) in conjunction with a high-deductible health plan, the Department of Labor's Employee Benefit Security Administration (EBSA) last week declared HSAs exempt from the regulatory grip of the Employee Retirement Income Security Act (ERISA).

Treasury Department HSA Site

A new section has been added to the Treasury Department website dedicated to Health Savings Account plans. Included are a list of FAQs, a section on Technical Guidance, an HSA Basics overview document, Press Releases and a Resources section that provides related links.

Treasury website

More HSA Guidiance Issued By The IRS And Treasury Department

Courtesy Of EBIA:

Today, the Treasury Department and the IRS issued their second round of
guidance for health savings accounts (HSAs). According to the
Treasury press release
under a high deductible health plan (HDHP) and the interaction between
an HDHP and other prescription drug benefits. In addition, guidance is
being issued to provide transitional relief for the prescription
coverage interaction as well as allowing HSAs to reimburse medical
expenses incurred after the establishment of the HDHP (rather than the
establishment of the HSA)." Four separate pieces of guidance were
issued.