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Today the Internal
Revenue Service released important new Health Savings Account guidance (Notice
2004-50). Notice 2004-50 consists of 88 questions and answers, along
with transition relief for a few specific situations. Questions and answers
of significant importance include: Q&A
10--specifying that coverage under an employee assistance plan, disease management
program or wellness program typically will not constitute a "health plan"
that would cause someone to lose his or her status as an "eligible individual"; Guidance
on how to calculate deductibles and out-of-pocket maximums in some difficult situations
(e.g., Q&A 20); Rules
for dealing with errors (e.g., withdrawals of excess contributions, Q&A
34); Clarification
that no time limit typically applies for when someone must submit an expense (Q&A
39); Significant
guidance on when an employer can contribute amounts on behalf of individuals and
the nondiscrimination rules (often those applicable to "cafeteria" plans
under Internal Revenue Code Section 125) relating to those contributions (Part
VI); Guidance
on how HSAs interact with cafeteria plans (Part VIII); Restrictions
on what are permissible investments for HSAs (Q&A 65); Clarification
that administration and account maintenance fees, when paid outside the HSA, do
not count towards the annual maximum contribution limit (Q&A 70, 71); Guidance
regarding certain responsibilities of HSA trustees and custodians (Part X); Clarification
that HSA amounts may not be restricted and only the account beneficiary (not an
employer) may determine how HSA distributions can be used (Q&A 79). You
can view the entire Notice
2004-50 here. 
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