News and Commentary
MANAGED CARE February 2007. ©MediMedia USA
Under the recently passed Tax Relief and Health Care Act of 2006 (H.R. 6111), individuals and employers may contribute $2,850 (for an individual) or $5,650 (for a family) to a health savings account (HSA) for 2007, regardless of their health plan's deductible.
In addition, the reform will allow the following:
- Full HSA contributions for employees who become eligible for HSA participation midyear, as long as the individual continues to be eligible for a full 12 months after the end of the taxable year;
- One-time rollovers from individual retirement accounts into HSAs;
- A one-time distribution of the amount in an individual's flexible spending account(FSA) or health resource account to an HSA before Jan. 1, 2012; and
- Under current law, coverage under an FSA during the grace period renders an individual ineligible to make HSA contributions, even if there is no money left in the FSA. Now, FSA coverage will be disregarded, as long as certain conditions are met.
MANAGED CARE February 2007. ©MediMedia USA