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How can "Preventive Care" be covered by an HSA?
  A-1.  The amounts attributed to "preventive care" may be covered only AFTER          
              satisfaction of the qualified plan deductible.
A-2.  The amounts attributed to "preventive" care may be covered before incurring the
               qualified plan deductible.
A-3.  Preventive care is only coverable if associated with an existing illness in order to
               prevent that illness from worsening or recurring.
A-4.  Preventive care is only an eligible expense if it consists of mainly drugs prescribed
               by a physician licensed by the state in which the eligible individual resides.

“Permitted coverage ” (whether through insurance or otherwise)
 under IRC section 223(c)(1)(B) is coverage for.....  
 1. accidents  2. disability 3. dental care 4. vision care
 5. long-term care 6. prescription drugs223(c)(1)(B).
   A-1    1,3,5 and 6 ONLY
 A-2    2, 4, and 6 ONLY
 A-3    1, 2, 3, 4, and 5 ONLY
 A-4    All of the above examples


The stated purpose for IRS Ruling 2004-25 was-                                                                                           
  A-1.  To establish additional rules governing who may contribute to an HSA
A-2.  To provide transitional relief to those eligible individuals who established an HSA
         on or before April 15, 2005 regarding covering qualified medical expenses incurred
         prior to the establishment of the HSA.
A-3.  To allow for preventative care to include prescription drugs
A-4.  To render guidance to accountants who were unfamiliar with HSAs


What are the "catch-up" contributions for an eligible individual after age 55 in 2007?  
  A-1    $600
A-2    $700
A-3    $800
A-4    $900

If an employer offers an employee a choice between a low-deductible
health plan and a high-deductible health plan (HDHP),
employee selects coverage only under the HDHP, is
the employee an eligible individual under section 223(c)(1)?
  A-1    Yes, provided the employee is otherwise eligible
A-2    Not unless the employee opens a qualified savings account first
A-3    Only if all employees choose the same HDHP plan
A-4    Yes, if the employee requests the HDHP plan.



May an individual who is covered by an HDHP and also has
a discount card to obtain discounts for health care services
or products, contribute to an HSA?
  A-1    No.  Health care services and products must be obtained only by paying in cash,        
          check or through insurance carrier billing.
A-2   Only prescription drugs may be obtained through the use of a discount card
A-3   Yes. Discount cards that entitle holders to obtain discounts for health care
          services or products at managed care market rates will not disqualify an
          individual from being an eligible individual for HSA purposes if the individual is    
          required to pay the costs of the health care (taking into account the
         discount) until the deductible of the HDHP is satisfied.
A-4   Yes, provided the discount card is used ONLY prior to the satisfaction
         of the HDHP deductible




What are the comparability rules that apply to employer contributions to
Health Savings Accounts (HSAs)?
A-1   Employers must make comparable contributions to all employees based on their employment
         class (ie. All Executives, All Mangers, All Others) 
A-2   Employers are not directed by the IRS in matters of comparable contributions to employees'
A-3   Employers must contribute amounts to all family-covered employees' HSAs THREE TIMES
         that which they contribute to all individual-only employees' HSAs.  
A-4   If an employer makes contributions to any employee’s HSA, the employer must make
         comparable contributions to the HSAs of all comparable participating employees.



Which is NOT an example of "preventative care" for purposes of an HSA?    

A-1  Inpatient confinement for drug abuse        
A-2  Obesity and weight loss programs
A-3  Routine pre-natal and well baby care

A-4  Routine physical exams



Is a government retiree who is enrolled in Medicare Part B (but not Part A) an eligible
individual under section 223(c)(1)?  

A-1  No. Under section 223(b)(7), an individual who is enrolled in Medicare may not contribute to
        an HSA.

A-2  Yes, but he must withdraw from Medicare Part B within the next 12 months
A-3  No.  Under section 223(b)(7), the government employee must waive Part B to be an eligible

A-4  Not enough information to provide an answer



John is covered by a qualified HDHP and has a separate prescription drug rider.  
May he set up a tax-qualified HSA and contribute to it?  

A-1  Yes.  So long as the qualified HDHP does not also cover prescription drugs
A-2  No.  John may not contribute to a qualified HSA UNLESS the separate prescription drug rider
         is also a HDHP and will not cover prescription drugs until that deductible is satisfied.
A-3  Yes.  So long as John is covered by the qualified HDHP, it doesn't matter what other               
        coverage his rider provides for.

A-4  Yes.   provided that the prescription drug plan also covers doctor co-pays from dollar one.



Employees may transfer distributions from the following into their HSA accounts without
       1)FSA,, IRAs, 401Ks    2)HRAs, FSAs, IRAs    3) HRAs & FSAs    4) CDs, HRAs & 401Ks

A-1            # 1
A-2            # 3
A-3            # 4
A-4            # 2  



May an otherwise eligible individual who is eligible for Medicare, but not enrolled in
Medicare Part A or Part B, contribute to an HSA?


A-1     No.  Medicare eligible individuals MUST choose coverage through Medicare
A-2     Yes, but only in lieu of Medicare Part B  
A-3     Yes, but only in lieu of Medicare Part A
A-4     Yes.  An otherwise eligible individual under section 223(c)(1) who is not actually enrolled in
            Medicare Part A or Part B may contribute to an HSA until the month that individual is enrolled
            in Medicare.


13 Act HR6111 modified the maximum amount that can be contributed into an HSA account to...

A-1      An amount equal to the deductible of the HDHP
A-2      Three times the annual deductible of the HDHP
A-3      An amount equal to the deductible of the HDHP less $1,000
A-4      For the tax year 2007, $2850 for individuals and $5650 for HSA-eligible indivuduals with
            "family" coverage.

May an otherwise eligible individual who is covered by both an HDHP and also by insurance
contracts for one or more specific diseases or illnesses, such as cancer, diabetes, asthma or

congestive heart failure, contribute to an HSA if the insurance provides benefits before the

deductible of the HDHP is satisfied?               

A-1      No, only if the "specific disease" coverage also is a HDHP
A-2      Yes, provided the specific disease coverage does not cover ANY prescription drugs
A-3      Yes, because specific disease coverage is allowed under "permitted insurance".      
A-4      They may only contribute if the specific disease coverage is for cancer or heart-related



Do the comparability rules apply to amounts rolled over from an employee’s HSA or Archer
Medical Savings Account (Archer MSA)? MSA)?


A-1    Yes.  They apply to ALL contributions to ALL HSA accounts
A-2    No. The comparability rules do not apply to amounts rolled over from an employee’s HSA
          from a previous employer or Archer MSA.
A-3    No.  Not unless the employee's HSA from a previous employer has a specific provision
          attached that allowed for such rollover.

A-4    Yes, but only if the employee matches the rolled over amount



What are the tax treatments of contributions made by a family member on behalf of
an eligible individual?  

A-1.   The contribution is deductible to the family member REGARDLESS of
           whether that family member itemizes deductions or not on their own return.

A-2.   The contributions are deductible to the family member ONLY if the family
           itemizes deductions on thei own tax return.
A-3.   The family member is taxed based on the Gifts to Minors IRC Rulings
A-4.   The amount of the contribution by the family member is tax deductible at
           the rate of $0.50 for every dollar contributed.



May a sole proprietor who is an eligible individual contribute to his or her own HSA without
contributing to the HSAs of his or her employees who are eligible individuals?

A-1    Yes.  A sole proprietor not an employee. Yes. The comparability rules apply only to
          contributions made by an employer to the HSAs of employees.
A-2    No.  Contributions to ALL HSAs MUST be comparable.  Therefore, if the employer who is
          a sole proprietor contributes to his own HSA, he must contribute a like amount to ALL employees' HSAs.
A-3    No.  He must contribute at least one half of the amount he/she has contribute to his/her
          own HSA to the employees' HSAs
A-4     The ruling does not deal with this issue  



Can a state high-risk health insurance plan (high-risk pool) qualify HDHP?                                                                            

A-1     No.  To qualify as an HDHP, the plan must be offered by a commercial insurance carrier
            outside of any "risk pool" type of program
A-2    Yes, provided the high-risk plan is recognized as such by the Internal Revenue Service
A-3    Yes, provided the plan meets the required deductible and out-of-pocket requirements of
          an HDHP.

A-4    Undeterminable with the information provided



Health insurance premiums are generally not an eligible expense for coverage with HSA
proceeds.  What are the exceptions?   

A-1    Payment of a dependant's health insurance premium
A-2    "Critical illness" and COBRA premiums
A-3    Medicare Suppliment and long term care premiums
A-4    Long term care and COBRA premiums



An individual who becomes covered under a qualified HSA plan on July 1st of a
given tax year may contribute.....
A-1    One-half of the annual maximum               

A-2    Two-thirds of the annual maximum               

A-3    The entire annual maximum               

A-4    Not cover by the Act



May an otherwise eligible individual who is covered by an HDHP and also receives health
benefits under TRICARE (the health care program for active duty and retired members
of the uniformed services, their families and survivors) contribute to an HSA?  


A-1    Yes.  An otherwise eligible individual who is eligible to receive and receives TRICARE
           benefits is eligible to contribute to an HSA.  
A-2    No. Covered individuals under TRICARE are not eligible to contribute to an HSA   
A-3    Yes but only if the individual selects the HDHP through TRICARE
A-4    No program entitled TRICARE actually exists



HR6111 modifies the date on which the "cost of living adjustment" is calculated to  _____________
and requires the Treasury Department to announce the cost of living adjustment on _______________

for the following tax year.  
A-1       March 31st................ June 1st
A-2       January 31st.............  April 1st
A-3       December 31st ........   February 1st of the following year
A-4       May 31st.................   July 1st



May an HDHP impose a lifetime limit on benefits?     
A-1        No.  All qualified HDHP plans MUST have no lifetime limit
A-2        Yes. An HDHP may impose a reasonable lifetime limit on benefits provided under the plan
A-3        Yes but only with expressed written permission from the IRS
A-4        The IRS hasa not ruled on the imposition of lifetime limits on qualified HDHPs



If an employee and his or her spouse are eligible individuals who work for the same employer and one
employee-spouse has family coverage for both employees under the employer’s HDHP, must the
employer make comparable contributions to the HSAs both employees? 

A-1        The employer is not required to contribute to the HSAs of both employee-spouses.                  

A-2        Yes.  If both the husband and wife are employees of the employer and both are HSA-eligible,
               the employer must disregard the fact that they are husband and wife and contribute to both

A-3        Yes unless one spouse waives the employer contribution                

A-4        No.  The employer has no obligation to contribute to any emplyee's HSA



If an otherwise eligible individual under section 223(c)(1) is eligible for medical benefits through the
Department of Veterans Affairs (VA), may he/she contribute to an HSA? 

A-1       Yes but only with written permission from his/her commanding officer                 

A-2       Yes but only if he/she has received VA benefits with the preceding three months                 

A-3       No.  Individuals eligible for VA benefits may never contribute to an HSA.                 

A-4       Yes.  An otherwise eligible individual who is eligible to receive VA medical benefits, but who
              has not actually received such benefits during the preceding three months, is an eligible to
             contribute to an HSA.



Does coverage under an Employee Assistance Program (EAP), disease management program, or

wellness program make an individual ineligible to contribute to an HSA?                                                                                                                                         

A-1         No, unless the EAP provides "significant benefits" and could be considered a "health plan" for
               purposes of section 223(c)(1).                   

A-2        Yes.  An eligible individual MAY NOT be covered under ANY OTHER TYPE OF HEALTH

A-3        Yes if the EAP provides any benefits other than wellness.                

A-4         No.  The EAP is considered "permitted insurance" under section 223(c)(3) 



An individual who becomes eligible during the last month of a calendar year may contribute

as if he/she were eligible for the entire year provided that......                                                                                                                                                              

A-1          The individual remains eligible for at least the next six months                  

A-2          The individual remains eligible for at least the following twelve months                 

A-3          The individual notifies the IRS within 90 days of electing that option                  

A-4          The individual waives the Taxpayer Right to deduct more than for the number of months
                he/she was actually HSA-eligible 



Must coverage for “permitted insurance” described in section 223(c)(3) be provided under insurance

A-1         No. They may be provided in either insurance contracts or through self-insured contracts
A-2         Yes. Benefits for “permitted insurance” under section 223(c)(3) must generally be provided
               through insurance contracts and not on a self- insured basis. However, where benefits (such
               as workers’ compensation benefits) are provided in satisfaction of a statutory requirement)
               and any resulting benefits for medical care are secondary or incidental to other benefits, the
               benefits will qualify as “permitted insurance” even if self- insured.
A-3         The definition of "permitted insurance" varies according to state laws
A-4         The IRS has not ruled on this issue as of yet



Are employees who are included in a unit of employees covered by a collective bargaining agreement 
comparable participating employees?  
                                                                                                                                                                                                                                                                                                                                                                   A-1           Yes.  The ruling does not separate union and non-union employees.                

A-2           Generally yes, but only if they actively employed full time as of the time the employer's HSA
                  was initiated.                 

A-3           Generally No. Collectively bargained employees who are covered by a bona fide collective
                  bargaining agreement between employe representatives and one or more employers are not
                  comparable participating employees.                   

A-4           The ruling does not deal with this issue



The amount that can be distributed into an HSA from an HRA and/or FSA is                                                                                 

A-1            Unlimited                 

A-2            The balance in the HRA or FSA as of December 31, 2006 or at the time of distribution                 

A-3            The lessor of the balance in the HRA or FSA as of September 21, 2006 or at the time of distribution                 

A-4            50% of the balance in the HRA or FSA as of the date of distribution