HSA

Recent legislation allows employers to continue offering first-dollar telehealth coverage without jeopardizing the ability to contribute to a health savings account (“HSA”), but only through the end of the 2024 plan year.

Background – HSA Eligibility

Employees can make and receive pre-tax contributions to HSAs to use for qualified medical expenses. To be “eligible” to make or receive contributions to an HSA, you (a) must be covered by a high deductible health plan (“HDHP”), and (b) may not have other non-HDHP coverage that covers benefits before the HDHP deductible has been met.

Certain types of coverage, like dental and vision care, is disregarded in determining whether an individual is “eligible” to contribute to an HSA. Disregarded coverage does not have to be coordinated with HDHPs. This means that participants can receive “first-dollar” coverage for disregarded coverage and still be eligible to make or receive contributions to an HSA.Continue Reading Employers Can Continue to Cover Telehealth Benefits Before HDHP Deductible Is Met

The Internal Revenue Service has issued guidance (Notice 2020-15) that allows sponsors of high deductible health plans (“HDHPs”) to reimburse up to the full cost of medical care services and items for testing and treatment of COVID-19 before plan participants meet the plan’s minimum statutory deductible.  Accordingly, participants…
Continue Reading IRS Clears the Way for High Deductible Plans to Waive Cost Sharing for Coronavirus Testing

Taxpayers may treat the $6,900 original annual contribution limit for family coverage to health savings accounts (“HSAs”) as the limit for 2018, according to IRS guidance released on April 26, 2018 (press release; IRS Rev. Proc. 2018-27).  Employers that took steps to comply with the reduced limit may need to take action.

As discussed in our earlier blog post, the contribution limit for family coverage to HSAs for 2018 was reduced by $50 from $6,900 to $6,850.  Bowing to pressure from stakeholders who explained to the Treasury Department and IRS that implementing the reduction would impose administrative and financial burdens, the IRS announced that for 2018, taxpayers with family coverage under a high deductible health plan may treat $6,900 as the maximum deductible HSA contribution.

This is welcome relief for employers that had not yet taken steps to comply with the reduced limit.  However, for employers that already informed participants of the change and took steps to modify salary reduction elections or return contributions in excess of the lower limit, this guidance likely triggers additional action.Continue Reading Original HSA Family Contribution Limit to Remain in Place for 2018

Changes to cost of living adjustments for health savings accounts (“HSAs”) by the Tax Cuts & Jobs Act of 2017 (the “Act”) caused a $50 decrease in the contribution limit for family coverage to HSAs for 2018.  The limit was reduced from $6,900 to $6,850 (original limit here; revised limit here).

This affects only 2018 contributions for employees with family coverage who have exceeded or made elections that will exceed the original HSA contribution limit for 2018.Continue Reading HSA Family Contribution Limit Reduced for 2018

The Equal Employment Opportunity Commission (“EEOC”) has requested that the United States District Court of Minnesota stop Honeywell from implementing a wellness program that would provide financial incentives for undergoing biometric screenings.  The EEOC is challenging Honeywell’s program on grounds that it would violate the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination Act (“GINA”).  The EEOC’s request is a surprising development because, as recently as last year, the EEOC stated that it has not taken a position on whether and to what extent providing a financial reward to participate in a wellness program violates the ADA.  In addition, EEOC staff have not previously given any public indication that providing incentives to spouses for participating in a wellness program violates GINA.  Consequently, many employers provide financial rewards to encourage participation in wellness programs up to the limits permitted by the Health Insurance Portability and Accountability Act (“HIPAA”), as amended by the Affordable Care Act (“ACA”).  Employers that offer financial rewards (or impose financial penalties) for participation in wellness programs that request medical information or involve medical examinations should take note of this development.

Update:  On November 3, 2014, the District Court judge denied the EEOC’s request.Continue Reading EEOC Seeks to Stop Use of Financial Incentives for Wellness Program Participation