As part of some session-ending legislative housekeeping, Congress enacted the Tax Relief and Health Care Act of 2006 (P.L. 109-432). The law extends the Mental Health Parity Act (MHPA) for one more year and rejiggers the rules that apply to health savings accounts (HSAs).
Health Savings Accounts
The new law allows employees to roll amounts in their flexible spending accounts (FSAs), health reimbursement accounts (HRAs), and IRAs directly into HSAs. Other favorable changes were made to the HSA rules, as well.
Rollover rules. Employees get one shot to make a direct trustee-to-trustee rollover from an FSA or HRA. The amount that can be rolled over is limited to the lesser of the balance in employees' FSAs or HRAs as of September 21, 2006, or the cash balance in those accounts as of the distribution date (i.e., expenses incurred that haven't been reimbursed as of the date the determination is made aren't cou...(register to read more)