A. An employer, in conjunction with an account administrator, shall provide a current written statement to employees that details how money in their medical care savings accounts is or will be invested and the rate of return employees may reasonably anticipate on the investment of the savings accounts. The account administrator shall file the statement with the department.

B. Except as provided in Section 59A-23D-6 NMSA 1978, money in a savings account shall be used solely for the purpose of paying the eligible medical expenses of an employee and his dependents.

C. Payments may be made by the employee directly to a health care provider through the use of a debit card or check that accesses the employee's medical savings account. If the account administrator determines that the employee paid for goods or services that do not qualify as eligible medical expenses, the employee shall be required to reimburse his medical savings account, and he shall be liable for any federal and state taxes and penalties. If the employee chooses to be reimbursed for eligible medical expenses, the account administrator shall reimburse the employee from the employee's medical care savings account. When seeking reimbursement, the employee shall submit documentation of eligible medical expenses paid by the employee.

D. If an employer makes contributions to a program on a periodic installment basis, the employer may advance to an employee, interest free, an amount necessary to cover eligible medical expenses incurred that exceed the amount in the employee's savings account if the employee agrees to repay the advance from future installments or when he ceases to be an employee of the employer or a participant in the program. Such advances shall be exempt from taxation under the Income Tax Act [Chapter 7, Article 2 NMSA 1978].

History: Laws 1995, ch. 93, § 5; 1997, ch. 243, § 29; 1997, ch. 254, § 4; 2001, ch. 194, § 2.

The 2001 amendment, effective June 15, 2001, in Subsection C, added the first two sentences and in the third sentence, inserted "If the employee chooses to be reimbursed for eligible medical expenses", and deleted "for eligible medical expenses" following "savings account".

The 1997 amendment, effective April 11, 1997, substituted "Section 59A-23D-6 NMSA 1978" for "Section 6 of this act" in Subsection B and made stylistic changes in Subsections A and B.