WASHINGTON – The U.S. Treasury Department is urging credit unions and banks to offer Health Savings Accounts. Approved as part of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, HSAs are designed to help individuals save for medical and retiree health expenses on a tax-free basis. Any individual covered by a high-deductible health plan (HDHP) may establish an HSA. So far only two credit unions Jacksonville, Florida-based HealthAmerica CU and Wichita, Kansas-based Mid-American CU have stepped up to offer HSAs. To help educate more financial institutions on HSAs the Treasury has issued the following guidance emphasizing how easy it is to offer these accounts: 1.Any bank or credit union is automatically allowed to offer HSAs to their members/customers as either a trust or a custodial account. 2.Banks or credit unions can modify their IRA enrollment forms to reflect HSAs or use the model IRS forms. These model forms are available from the IRS or can be downloaded from the Treasury & IRS Web sites. 3. Reporting requirements are straightforward: (a)Form 5498 is used to report total contributions made to the account during the year and the value of the account at the end of the year. (b)Form 1099SA reports the total distributions taken from the account during the year. 4.Substantiation that distributions were used for qualified medical expenses is not required. 5.HSA funds can be invested in the same types of investments as IRAs. 6.Minimum deposit, minimum balance requirements, minimum distribution requirements, distribution timing requirements, and account fees can be set by the bank (i.e., the HSA rules do not apply any additional conditions on an HSA trustee or custodian). For more detailed information about HSAs visit www.treas.gov/offices/public-affairs/hsa/technical-guidance/