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WHA Financial Solutions' Compliance
Corner newsletter contains valuable information on timely
compliance and regulatory issues. Each newsletter is archived by date at www.whafs.com.
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IRS Revises Publication
969: Health Savings Accounts and Other Tax-Favored Health Plans
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The Internal Revenue Service
(IRS) has released a revised version of Publication 969: Health Savings Accounts
and Other Tax-Favored Health Plans. The publication summarizes the
eligibility, contribution limits, and qualified distributions for a
health savings account (HSA), health reimbursement arrangement (HRA),
health flexible spending arrangement (FSA), and medical savings account
(MSA). The publication, which is intended to give guidance to taxpayers
in filing their 2007 taxes, also serves as a helpful resource for
employers who sponsor employee health plans.
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WHCRA
Does Not Prohibit Claims Payments Based on U&C
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Under
the Women's Health and Cancer Rights Act (WHCRA), health plans are
required to provide mastectomy and subsequent breast reconstruction
benefits that "may be subject to annual deductibles and coinsurance
consistent with those established for other benefits under the plan or
coverage." In Krauss v. Oxford Health Plans, Inc., the U.S. Second
Circuit Court of Appeals ruled that a plan may limit payment for such
benefits based on usual and customary (U&C) charges without violating
WHCRA.
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IRS Notice 2008-30
Provides Guidance on Newly Effective Distribution Provisions
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The
IRS has issued Notice 2008-30, which provides guidance in a question and
answer format regarding distribution-related provisions of the Pension Protection
Act of 2006 (PPA) that become effective in 2008.
- Gap-period earnings - A retirement
plan must distribute excess 2007 deferrals by April 15, 2008. The
Notice states that the distribution must include the earnings from
the end of the taxable year to the distribution date
("gap-period earnings").
- Rollovers to a Roth IRA - Prior to
January 1, 2010, certain individuals are not eligible for a rollover
to a Roth IRA (for example, an individual with a modified adjusted
gross income greater than $100,000). The Notice clarifies that a
plan administrator is not responsible for assuring that the
distributee is an eligible individual.
For more
information, including information on the taxability of the Roth IRA
rollovers, qualified optional survivor annuity, and rules on determining
the present value of plan benefits, please see the Notice linked below.
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WHA Financial
Solutions, Inc.
800-362-7121
or 608-274-1820
The
information included in WHA Financial Solutions' Compliance Corner is
intended for general information purposes only. This information
does not and is not intended to constitute legal advice. Any
decisions whether to implement these ideas should be made by the reader
in consultation with professional financial, tax, and legal counsel.
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