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QSEHRA and Employer HSA contribution

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Client company adopted a QSEHRA.  Participants will purchase individual HDHP insurance policies and be reimbursed by QSEHRA.  May the company make direct HSA deposits on behalf of employees? (If employees make deposits, the amount is deductible on form 1040 but subject to FICA taxes.)  Is there a way for the company to make the deposits so that the company "does not offer a group health plan to any of its employees" and violate IRC 9831(d)(3)(B)(ii)?

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HSAs are generally not considered a group health plan so I think offering an HSA would not result in a violation of the QSEHRA rules. Employees can only make pretax contributions to an HSA through a cafeteria plan, so your client would need to have a cafeteria plan in order to make that happen. Also, the employer could make separate/additional employer contributions to employees' HSA, which would be excluded under Code Section 106 subject to the HSA non-discrimination requirements (or Section 125 nondiscrimination requirements if made under a cafeteria plan).

Good luck!

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DOL Field Assistance Bulletin 2006-02 supports the conclusion that an HSA is not a group health plan for DOL purposes, absent unusual circumstances.  However, the definition of group health plan under Section 9831(d) leads to the definition in section 5000(b) - a "plan," without elaboration.  Section 223 describes an HSA as an "account."  I have seen some secondary sources supporting use of HSA's with a QSEHRA and others concluding that an HSA is not a "plan" for IRS purposes.  However, I would feel more comfortable if saw an IRS statement that an HSA is not a group health plan.  

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