What discrimination rules apply to employer contributions to HSAs?

[billfgrady]

Section 223, which governs Health Savings Accounts (HSAs) is silent as to whether a discrimination test applies when an employer makes a contribution to the HSA of an employee. Notice 2004-2 provides that if "an employer makes HSA contributions, the employer must make available comparable contributions on behalf of 'all comparable participating employees' (i.e., eligible employees with comparable coverage) during the same period." Notice 2004-2 is silent as to how to apply this test in an affiliated service group setting. Is there any further guidance out there at this time on discrimination testing for employer contributions to HSAs? I assume that the discrimination rules contained in section 105(h) do not apply here.

[billfgrady]

Found it: I.R.C. 4980G.

[Ron Snyder]

You are correct that the nondiscrimination requirements of 105(h) do not apply. Moreover, IRS has clarified that "comparable participating employees" means employees participating under the same high-deductible health plan or policy. In essence, a company can provide a lower deductible for rank and file employees and a higher deductible plan for the HCE(s) coupled with an HSA.