(1) Every account holder or account administrator is required to annually submit the following information regarding each medical savings account:

(a) name of the account holder;

(b) address of the account holder;

(c) taxpayer identification number of the account holder;

(d) deposits made during the tax year by the account holder;

(e) amount of withdrawals made during the tax year by the account holder;

(f) dates of any withdrawals;

(g) interest or other income earned on the principal of the medical savings account; and

(h) amount of penalties withheld and remitted.

(2) The account holder must also include the name and address where the account is established and the account number.

(3) Both the contributions and any interest or other income earned on the account of a medical savings account are to be segregated by the account holder or account administrator from all other accounts.

(4) Each individual account holder must:

(a) establish a separate medical savings account with a financial or other approved institution; and

(b) segregate the account from all other accounts.

(5) Jointly held accounts do not qualify, although each spouse may be an account holder, regardless of income tax filing status. Each spouse would be allowed, within certain limitations, to reduce the federal adjusted gross income by the maximum allowable reduction of $3,000.

(6) Year-end interest reports provided to the taxing authorities and the account holder must be provided in such a manner that the interest earned on that account can be separately identified.

(7) Annual interest earned on excess contributions and principal in a Montana medical care savings account is excluded from Montana adjusted gross income and may only be withdrawn from an account to pay for eligible medical expenses.

(8) On or before January 31, an account administrator, other than an account holder, must file the information required under (1) on forms provided by or authorized by the department.

(9) Each individual account holder must file the information required in (1) on forms provided by or authorized by the department and be remitted with the individual income tax form for the corresponding tax year.

(10) Account holders or account administrators who withhold penalties on monies used for items other than eligible medical expenses or long-term care expenses must submit the penalties to the department.

(11) Account holders and account administrators must remit the penalties monthly by the 15th day of the following month when the total amount of penalties exceed $500.

(12) Account holders and account administrators whose total penalties withheld during the calendar year are less than $500 must remit the penalties on or before January 31 of the following year to the department. Self-administered individual account holders must report and remit penalties with the individual income tax form for the corresponding tax year.

(13) Failure to remit any withheld penalties within the time provided is considered to be an unlawful conversion of trust money. Penalties provided in 15-1-216 and 15-30-2641, MCA, apply to any violation of the requirement to collect, truthfully account for, and pay amounts required to be withheld from ineligible withdrawals of the account holder.