Treasury and IRS Issue Proposed Regulations Concerning Health Savings Account Comparability Rules

[Gary Lesser]

WASHINGTON, DC -- Today the IRS and Treasury issued proposed regulations with respect to the comparability rules for employer Health Savings Account (HSA) contributions. The proposed regulations generally follow the previously issued guidance on comparability rules. The rules also provide additional clarification with respect to a few issues not previously addressed.

Unlike many other employer-provided tax-favored benefits, the HSA rules do not have nondiscrimination rules restricting the amount of benefits provided to highly compensated employees. Instead, the HSA statute requires that all employer pre-tax contributions to employee HSAs be comparable. That is, all employer contributions to employee HSAs must be the same amount or the same percentage of the High Deductible Health Plan (HDHP) deductible for all employees with the same category (self-only or family) of HDHP coverage. These rules, as provided in prior guidance, provide an exception from the comparability rules for employer contributions to HSAs made through cafeteria plans.

See, Link to Proposed Regulations

[Guest KLCarter]

Do I understand correctly that there are still no nondiscrimination rules regarding what groups of employees the employer may determine are eligible for coverage under the HDHP and a corresponding HSA? So, for example, an employer may still require an employee to work 40 hours a week to qualifiy for HDHP coverage. If an employee only works 35 hours a week, then they would not qualify for HDHP coverage, and the employer would not have to contribute to an HSA, even though the 35 hr employee would be a comparable employee if he were eligible for an HSA?

[Guest justbetmd]

If post-tax HSAs are not subject to the nondiscrimination rules (just comparability) - what is the benefit of permitting employees to do it pre-tax through the company's cafeteria plan - where the company is subject to the nondiscrimination rules.

WASHINGTON, DC -- Today the IRS and Treasury issued proposed regulations with respect to the comparability rules for employer Health Savings Account (HSA) contributions. The proposed regulations generally follow the previously issued guidance on comparability rules. The rules also provide additional clarification with respect to a few issues not previously addressed.

Unlike many other employer-provided tax-favored benefits, the HSA rules do not have nondiscrimination rules restricting the amount of benefits provided to highly compensated employees. Instead, the HSA statute requires that all employer pre-tax contributions to employee HSAs be comparable. That is, all employer contributions to employee HSAs must be the same amount or the same percentage of the High Deductible Health Plan (HDHP) deductible for all employees with the same category (self-only or family) of HDHP coverage. These rules, as provided in prior guidance, provide an exception from the comparability rules for employer contributions to HSAs made through cafeteria plans.

See, Link to Proposed Regulations

[jala]

Regarding the proposed regulations for HSA, have final regulations passed. If so, could you please direct me to them.

Thank You.