Employer Contributions in an HSA

[Guest AnneKimb]

Hello. In understanding the discrimination rules in an HSA, is it possible for an employer to fund different contribution amounts for employees? for example, if the can more be funded for employers with family coverage vs. single?

[Gary Lesser]

Yes. An employer that satisfies the comparability rule by contributing the same amount/percentage to the HSAs of all eligible employees that have, for example, family HDHP coverage, is not required to contribute any amount for those eligible employees with Non-HDHP covrage (higher amount/percentage would also be acceptable).

[Guest AnneKimb]

Okay, but suppose you have all employees in the HDHP, and some have family coverage, others single. May the employer fund more to those with family coverage vs. single?

[g8r]

Yes, you can contribute different amounts based on the coverage they have. As long as you treat all those who have family coverage the same, then you're o.k. Likewise, as long as you treat those with single coverage you're o.k. And, the fact that one group has a higher or lower contribution does not create a discrimination problem.

[JDuns]

To give an example, assume an employer offers two HDHPs (plans A and B) each with three levels of coverage (employee only, employee + 1 and family).

If Plan A - Employee only coverage has a $1,200 deductible and the company contributes $400 (33%) and the Plan B deductible is $2,700, to meet the comperability rule the employer must contribute either $400 (the same dollar amount) or $900 (same percentage).

For the 4 family coverage options, all 4 options must be the either the same dollar amount or same percentage of the deductible but that dollar amount and percentage does not need to have any relationship to the employee amounts/percentages described in the preceding paragraphs. The employer could choose to contribute $0, $400, 100% of the deductible, any other amount.