Additional Guidance on HSAs Issued

The Treasury Department has issued additional guidance on health savings accounts, a type of health insurance plan that the Office of Personnel Management is considering adding to the Federal Employees Health Benefits program. The accounts, authorized by last year’s Medicare reform bill, allow participants in certain high-deductible health plans to set aside money in tax-favored accounts, although many of the details of how such plans will work are still being decided. In the new guidance, the Treasury Department said that the high deductible health plan generally cannot provide benefits before the deductible is satisfied, but there is an exception for benefits for preventive care. The guidance also listed benefits that can be provided by a high-deductible health plan, generally clarifying that traditional preventive care benefits – such as annual physicals, immunizations and screening services – are preventive care for purposes of HSAs, as well as routine prenatal and well-child care, tobacco cessation programs and obesity weight-loss programs. The guidance also clarifies that preventive care generally does not include treatment of existing conditions and that individuals covered by a health plan that provides prescription drug benefits before the minimum annual deductible of a high-deductible health plan has been satisfied generally may not make contributions to an HSA.