FSA-HSA-IRA
Exclusive Updates

2011 Guidelines for HSA's
There were no changes made to the guidelines for 2011. Below are the current guidelines that shall be in effect for 2011.

Minimum deductible amounts : $1,200 for individuals and $2,400 for families.

HSA contribution limits : Consumers can contribute up to the annual maximum amount as determined by the IRS. Maximum contribution amounts for 2010 were $3,050 for individuals and $6,150 for families.

Prorating of contribution limits : Prorating of the maximum contribution still no longer applies as long as the consumer was enrolled by Dec. 1 of the tax year and remains enrolled in a high-deductible health plan and eligible for an HSA for a 13-month test period.*

Timing for contribution limits : The maximum contribution limit will again be subject to an annual cost-of-living increase which will be communicated by June 1 of the preceding year by the US Treasury.

IRA to HSA transfer : Consumers are again able to make a one-time, tax-free trustee-to-trustee transfer from an IRA to an HSA. The individual must remain enrolled in high-deductible health plan and eligible for an HSA for a 13-month test period after the fund transfer.

FSA or HRA to HSA transfer : Employers can again allow employees to make a one-time tax-free transfer of certain amounts from an FSA or HRA to an HSA (provided the FSA or HRA was available as of Sept. 21, 2006). The employee must remain enrolled in a high-deductible health plan and eligible for an HSA for a 13-month test period in order to treat the transfer as a pre-tax transaction.
*Employers must follow all requirements by March 15, 2010 for 2010, for 2009 rollovers, or prior to the end of any upcoming plan year between now and Dec. 31, 2011.

FSA 2 1/2 month grace period : Consumers in an FSA can contribute to an HSA if their FSA balance is zero at the end of the preceding year. Or, if the consumer is eligible and the employer permits, a consumer can transfer the FSA balance as a one-time transfer to their HSA.

Comparable Contributions : Employers may again under certain conditions be eligible to make higher contributions for "non-highly compensated employees" without a cafeteria plan. Employer contributions to an HSA based on completion of wellness activities would still require funding through a cafeteria plan.

*If this 13-month requirement is not met, then the contributions become taxable and an additional 20% excise tax may be charged


Important FSA Health Care Reform Update
Starting Jan. 1, 2011 you will no longer be able to user your health care flexible spending account (FSA) to pay for over-the-counter (OTC) medications at a pharmacy, supermarket or other retail store without a prescription. This change is part of the Affordable Care Act passed in 2010.

Insulin, prescription medicines and some OTC supplies - such as bandages, crutches, blood sugar test kits and contact solution - will continue to be eligible, if your health care FSA plan allows.

If i get a prescription for an OTC medicine, how do I use my FSA to pay for it?
If you buy the medicine off the shelf you will need to submit an FSA claim form, copy of your receipt and your provider's prescription.

The prescriptions must include:
- Your name
- Name of medicine
- Dosage and form (quantity prescribed and instructions)
- Signature of the provider who wrote the prescription

If you ask a pharmacist to fill the prescription you will need to submit an FSA claim form with your receipt. Ask for a receipt that includes :
- Prescription number
- Your name
- Date of purchase
- Dollar amount

At Corporate Benefit Plans we strive to spread the importance of remaining informed and current with Health Care Reform. In doing so, we continue to keep you on the cutting edge of the most recent news related to our evolving industry.