WASHINGTON – The Department of Treasury and the Internal Revenue Service have issued for public comment model documents that can be used as trust or custodial agreements for Health Savings Accounts (HSA). According to the IRS, the proposed forms have been released in response to numerous public requests for a "safe-harbor document." "Many banks and other prospective HSA trustees and custodians would like to offer a product off the shelf and be certain that the form of the trust or custodial agreement meets the requirements under the Internal Revenue Code," said Tax Policy Acting Assistant Secretary Greg Jenner. "We look forward to hearing any comments that interested parties may have and finalizing these documents for use as soon as possible." HSA trustees and custodians may currently use some or all of the language from the draft forms in their own documents. The public comment period will be open for 30 days. The Treasury and the IRS also issued guidance providing transition relief to health plans that are unable to qualify as high deductible health plans (HDHPs) due to state mandates. Under the guidance, a health plan that fails to qualify as an HDHP because it provides benefits required under a state law in effect on January 1, 2004, will nevertheless be treated as an HDHP until January 1, 2006. The guidance will enable individuals in states that require health plans to provide certain benefits the ability to participate in HSAs. Individuals can benefit from HSAs while allowing their states time to modify state laws to allow HSA-compatible HDHPs. Generally, HDHPs must have a high deductible and can provide no benefits other than preventive benefits below that deductible. Some state insurance laws, however, require health plans to provide certain benefits without a deductible, often as an extension of mandates related to preventive benefits. Because the HSA law became effective less than a month after it was enacted, some states with such requirements have not had a chance to amend their laws to allow HDHPs, for example, by replacing first-dollar benefit requirements with a requirement that benefits be provided no less favorably than other benefits. The Health Savings Custodial Account and HSA Trust Account drafts can be found at www.irs.gov/pub/irs-dft/d5305c.pdf and www.irs.gov/pub/irs-dft/d5305b.pdf respectively.