Posted: 2/27/2007

The IRS recently issued Notice 2007-22, which describes the steps that an employer and employee must follow in order to transfer amounts from a health flexible spending arrangement ("FSA") or health reimbursement arrangement ("HRA") to a health savings account ("HSA") on a tax-free basis. The requirements for making this transfer, which are complex, must be followed to avoid adverse tax consequences for employees. The attached memo contains a summary of the guidance, and the attached checklist summarizes the requirements that employers should follow to make the transfer.

For more information on HSAs and the new guidance, please contact Christine Keller, Bill Sweetnam, Brigen Winters, or Heather Meade by calling (202) 857-0620.