UPDATE: IRS Provides Transition Relief for Health Savings Account Plans in Maryland
Under Maryland law, effective January 1, 2018, 100% of the cost of male sterilization was to be provided by insurance companies without a deductible, which put health plans with high deductibles (HDHPs) at risk for disqualification under federal law. This conflict between state and federal law had the unforeseen consequence of invalidating Health Savings Accounts (HSAs) in Maryland. The IRS is aware of Maryland’s law, and the resulting complications.
In view of Maryland’s situation, the IRS is providing transition relief for periods before 2020 (back to the effective date of Maryland’s law). During this period, individuals with HDHPs will not be disqualified from their HDHPs or their HSAs. During this time, individuals and employers may continue to contribute to HSAs, as they normally would have, prior to Maryland’s law and its conflict with federal law.
Maryland has until the end of the transition relief period to change its law to eliminate the state/federal law conflict. As mentioned in our previous blog, Maryland Law Jeopardizes the Benefits of Health Savings Account Plans in Maryland, Maryland is currently attempting to pass legislation, under SB 137, to resolve this issue.
Please consult your HSA/health insurance provider for updates.Back To List