HSA Rollover Transition Deadline

The Internal Revenue Service and U.S. Treasury recently issued guidance regarding how employers can rollover their health Flexible Spending Arrangements (health FSAs) and Health Reimbursement Arrangements (HRAs) to Health Savings Accounts (HSAs) for their employees.

The guidance provides a special transition rule for transfers for 2006. Under the transition rule, the amendment, election and transfer must take place by March 15, 2007.

The Tax Relief and Health Care Act of 2006, Pub. L. No. 109-432, enacted Dec. 20, 2006, allowed employers to amend their health FSAs or HRAs, with balances on Sept. 21, 2006, for a one-time rollover to an HSAs by 2012. The guidance clarifies the requirements for making these rollovers, which must be made directly to the custodian or trustee of the HSA.

Under the guidance, a health FSA with a grace period or HRA must be amended and a rollover selected by an employee before year end. The balance amount must be transferred to the HSA by March 15 of the following year. The ability to make these transfers will facilitate the transition to an HSA-eligible health plan when employees are covered by an HRA or FSA.

You may like these other stories...

2014 has marked the fifth consecutive year in which the percentage of US-based internal auditors who earned bigger paychecks increased, according to a new study from the Institute of Internal Auditors (IIA).This year, 92...
A new survey from online accounting software provider Xero found that nearly 90 percent of small businesses are forecasting an increase in revenues next year, while 21 percent are expecting growth of more than 100 percent....
Drug patents held overseas can pare makers’ tax billsAs the Obama administration tries to stop companies from avoiding taxes by moving their headquarters overseas, the makers of some of the world’s most lucrative...

Already a member? log in here.

Upcoming CPE Webinars

Oct 9In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards.
Oct 15This webinar presents the requirements of AU-C 600, Audits of Group Financial Statements (Including the Work of Component Auditors).
Oct 21Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience’s communication style.
Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.