HSAs in Cafeteria Plans

[Guest kbs]

A company has a cafeteria plan and provides a company contribution. The company wants to offer HSAs as a qualified benefit under the cafeteria plan. However, the company wants to set it up so that, if a participant picks the HSA benefit, the overall company contribution that the participant may receive will be reduced. Does anyone see any issues with this set up? Thanks.

[sloble@crowleyfleck.com]

This sort of extra involvement with the HSA could reflect employer endorsement and maintenance of the HSA which could cause the HSA program to be subject to ERISA.

[papogi]

kbs, maybe you can clarify if you really mean the HDHP, and not the HSA. Often, when people talk about the "HSA benefit," they sometimes mean the HDHP (since they are designed to go hand in hand). As AshleyL stated, the employer can't endorse an HSA, or they will have ERISA issues. They can, however, reduce their contribution toward the premium for the HDHP (since the premium will be lower for this plan in the first place, and hopefully the employee's portion would also go down).