ADMINISTRATION SUBSTANTIATION

No substantiation is required prior to reimbursement or distribution.  Presumably the account holder of an HSA must substantiate any claimed reimbursements for medical expenses to the IRS if requested.  Debit or credit cards can be used to receive distributions from HSAs.  Notice 2004-2, Q & A 37.

ADMINISTRATION INFORMATION REPORTING

Employer contributions to an HSA must be reported on the employee’s Form W-2.  Reporting for HSAs will be similar to information reporting for Archer MSAs.  The IRS will release forms and instructions.  Notice 2004-2, Q & A 34.

The 2004 Form W-2 contains specific references to HSAs for reporting of amounts in Box 12.  Although it is likely that a new Form 1099-HSA will be required to be filed by the trustee, no draft of that form is currently available.

New Form 8889, Health Savings Accounts, as referenced in the 2004 Form W-2 instructions, will likely be required to be filed with an employee’s Form 1040 to report contributions to an distributions from HSAs.

HEALTH SAVINGS ACCOUNTS

HSA’s

ERISA APPLICATION

The application of ERISA to an HAS, particularly one funded with employer contributions, is currently unclear. Treatment as an ERISA plan, or part of an ERISA plan, may entail reporting requirements for the employer and also potential fiduciary issues.  To the extent an Has can be viewed as a supercharged version of an Archer MSA, which the Service has previously analogized to an IRA, then it may be possible that an HAS escapes ERISA application absent significant endorsement activities by an employer.  See Notice 96-53, 1996-2 CB 219; ERISA Interpretive Bulletin 99-1 (DOL Reg. § 2510.3-2(d).

EFFECTIVE DATE / CUT-OFF DATE

Effective Date: January 1, 2004.  P.L. 108-173.         Cut-off date: None

The IRS has asked for comments on whether transition relief should be provided in cases of inappropriate coordination of a HD plan with other coverage.  Notice 2004-2.

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