Proration of HSA minimum deductibles

[jstorch]

Notice 2004-50, Q/A 24 effectively permits prorating the minimum deductible for periods longer than 12 months.

Allowing proration also for periods less than 12 months (e.g., for single coverage, permitting a $500 deductible for a six month short plan year)

seems logical, but is not addressed in the Q/A. Consequently, I don't think "short" proration is permitted. Is there any consensus on the issue? Can anyone provide any items addressing the issue, one way or another?

[Guest elatchana]

Jstoch,

I recently posted a similar question regarding a short HDHP plan year (ie, whether you can prorate the mimumum deductible). Have you figured out an answer to your question? I would be very interested in hearing what you found.

Thanks.

Notice 2004-50, Q/A 24 effectively permits prorating the minimum deductible for periods longer than 12 months.

Allowing proration also for periods less than 12 months (e.g., for single coverage, permitting a $500 deductible for a six month short plan year)

seems logical, but is not addressed in the Q/A. Consequently, I don't think "short" proration is permitted. Is there any consensus on the issue? Can anyone provide any items addressing the issue, one way or another?

[GBurns]

I really do not see why you have a problem. What am I not understanding?

Q&A 22 and 23 seem to adequately address periods of less than 12 months. Various periods are illustrated. It should not matter to the arithmetic whether the change is to another HDHP or termination with no continuing HDHP.

[jmor99]

Gburns: Actually, I don't think Q&A 22 and 23 address the question here. Those Q&As have to do with receiving credit, i.e. deductible carryover credit from the previous year or previous coverage (whether on a group basis or on an individual basis) and whether or not that would effect eligibility for an HSA ( the answer being no).

Their question has to do with pro-rating the minimum required deductible for a period of less than 12 months going forward.

For instance, if the short plan year is to be 7/1-12/31/06, can the plans 1200 deductible be prorated to 600 and still allow contributions to an HSA? (forget about a deductible carryover from the previous year)