Distribution upon death of employee with dependents
Sec. 24. (a) This section applies if an individual:
(1) whose employer participates in a medical care savings
account program; and
(2) who has one (1) or more dependents who are covered under
the account established for the benefit of the individual;
dies.
(b) After the death of an individual described in subsection (a),
the money in the individual's medical care savings account may
continue to be used for the benefit of the individual's dependents and
remains exempt from taxation as provided under this chapter if, not
more than sixty (60) days after the individual's death:
(1) the individual's medical care savings account is transferred
to a new account administrator; or
(2) the dependents of the individual request in writing that the
account administrator of the late individual's employer remain
the administrator of the account, and the account administrator
agrees to retain the account.
(c) If the former employer of an individual described in subsection
(a) is not informed, within ninety (90) days after the individual's
death, of the name and address of an account administrator to which
the medical care savings account has been transferred under
subsection (b)(1), the former employer shall pay the money in the
medical care savings account to the estate of the individual under
subsection (e).
(d) If:
(1) the dependents of an individual described in subsection (a),
under subsection (b)(2), request in writing that the former
employer's account administrator remain the administrator of
the individual's medical care savings account; and
(2) the account administrator does not agree to retain the
account;
the former employer shall, within ninety (90) days after the
individual's death, pay the money in the individual's medical care
savings account to the estate of the individual under subsection (e).
(e) Under the circumstances described in subsection (c) or (d), the
account administrator shall distribute the principal and accumulated
interest in the account to the estate of the individual by mailing a
check to the personal representative of the individual (as defined in
IC 29-1-1-3).
(f) The distribution of the balance in a medical care savings
account under subsection (e) is not income to the individual or to the
estate of the individual that is subject to taxation under IC 6-3-1
through IC 6-3-7.
As added by P.L.92-1995, SEC.2 and P.L.93-1995, SEC.2.
Last modified: May 28, 2006