The IRS released the 2009-2010 Priority Guidance Plan for the projects to be completed from July 2009 through June 2010.

Click here for the full report.

The IRS has published final regulations on the HSA comparability rules and how to report and pay excise taxes for failure to comply with comparability requirements or various group health plan mandates (including COBRA and HIPAA). You will find few differences between these final regulations and the proposed regulations issued in 2008. (These comparability provisions apply to employer contributions made for calendar years beginning on or after Jan. 1, 2010.)

The following are comments on excise tax reporting and the HSA comparability requirements.

Excise Tax Reporting. Persons can be liable for an excise tax for failure to meet the Code's requirements regarding

• COBRA
• HIPAA portability (including GINA mandates)
• Mental health parity, and
• Minimum hospital stays for newborns and mothers or Michelle's Law.

Individuals liable for an excise tax generally must file IRS Form 8928 and pay the tax by the due date for filing their federal income tax returns (without extensions). Take note of this provision eliminating extensions for filing the Form 8928 because it may be a surprise for companies routinely filing extensions.

A Form 8928 must be filed by employers liable for an excise tax for noncomparable HSA or Archer MSA contributions by the April 15th following the calendar year in which the noncomparable contributions were made. (Form 8928 has not been released yet, but a version has been released requesting comments.)

The excise tax reporting provisions apply to any Form 8928 due on or after Jan. 1, 2010.

HSA Comparability Requirements.

The final regulations reflect changes to the HSA comparability rules made by the Tax Relief and Health Care Act of 2008 (TRHCA). Some of the changes result in the following:

• The regulations clarify that comparable contributions are required for all non-HCEs who are within the same group and for all HCEs who are within the same group even if an employer may make larger annual HSA contributions for non-HCEs than for HCEs who are within the same group of comparable participating employees. (This is permitted under TRHCA).
• An employer may make a full year's worth of HSA contributions under TRHCA's full-contribution rule for mid-year eligible individuals, so long as contributions are made on an equal and uniform basis for all comparable mid-year eligible individuals.
• An employer can make a larger HSA contribution for employees in a higher tier of family HDHP coverage than to those in a lower tier even if the employees in the higher tier are all HCEs and the employees in the lower tier are all non-HCEs. (For instance, self-plus-two is a higher tier than self-plus-one.)
• An employer can offer qualified HSA distributions (i.e., direct rollovers to HSAs from health FSAs or HRAs) to any eligible employee covered under any HDHP if the employer offers qualified HSA distributions to all such employees. Alternatively, an employer may limit qualified HSA distributions to eligible employees covered under the employer's HDHP.

Click here to view copy of pertinent regulations. (Treas. Reg. Secs. 54.4980B-2, 54.4980D-1, 54.4980E-1, 54.4980G-1, 54.4980G-3, 54.4980G-4, 54.4980G-6, 54.4980G-7, 54.6011-2, 54.6061-1, 54.6071-1, 54.6091-1, and 54.6151-1, 74 Fed. Reg. 45994 (Sept. 8, 2009)

• An account holder’s interest in an HSA is subject to an IRS levy under Code Section 6331, and
  
• The account holder will be liable for the 10% additional excise tax on nonmedical HSA distribution unless (at the time of the levy), the holder was 65 years of age or holder or was disabled (as defined in Code Section 72(m)(7)).

Click here to read a copy of Chief Counsel Advice 200927019, 2009 WL 1894726 (May 1, 2009)].

The IRS has released Rev. Proc. 2009-29, which addresses the 2010 plan limits for High Deductible plans and Health Savings Accounts.

To read Rev. Proc. 2009-29, click here.

IRS priority guidance list for fiscal year 2008-2009 which began July 1, 2008 was published on September 10, 2008. 

Click here for the full report.

A new website, www.sba.gov/hsa/, has been announced by the U.S. Small Business Administration and the Treasury Department. The intention of the website is to educate small businesses as to the benefits of health savings accounts.

IRS Notice 2008-59 presents over forty frequently asked questions and answers that cover a broad range of HSA topics including setting up an an account, HSA contributions and distributions, individual eligibility and issues related to High Deductible Health Plans.  

To read Notice 2008-59, click here. 

The IRS released two updates recently. Notice 2008-51 gives clarification on HSA funding distributions when transfering funds from an IRA to an HSA. Notice 2008-52 pertains to various aspects of contributions which arise from amendments to the HOPE Act, and more specifically to the "Full Contribution Rule."  

 To read these updates, click here.

This week, the Treasury Department and Internal Revenue Service issued new maximum contribution levels for Health Savings Accounts (HSAs) and out-of-pocket spending limits for High Deductible Health Plans. These amounts have been indexed for cost-of-living adjustments for 2009.