HSA Pre-funding

[Guest Skippy]

I understand ers can fund an HSA, and if they do, they have to make comparable contributions. I can this this on a monthly basis.

1. Can the plan allow the employer to pre-fund an HSA based on an appeal where the ee has a large expense and the HSA doesn't yet have enough $$ in it to cover the deductible? HSA new this year.

2. If so, I think I would have to make the same contribution to other eligible ees in the same classification.

Any thoughts?

Cathy

[leevena]

An employer can fund the HSA in a variety of frequency's, but no matter which one choosen, all employees must be treated the same. For example, if you promise $1200 per year, with $100 per month, and in 3rd month someone wants the entire amount ($1,000), you would need to give it to all employees.

[jmor99]

Leevena: I agree with your response. However, just as food for thought: If the employer runs the comparability test on 1/1 and then not again until 12/31, everything should be ok both times even though the employer might have advanced to someone in need during the year. I wonder.......

Even if this were possible, the employer would have to put in writing the conditions and circumstances required for the advance to be made.

Here's a better, "more legal" possibility: Set the HSAs up with a provider that has a loan or advance feature.

I know of one TPA that does this and a bank that will have this feature by 7/1.

The more I think about this, the more I think you could make my 2nd paragraph work. For instance, if you put in writing that anyone who has incurred $1,000 (or some $ figure) before the third quarter (or some time frame) of a calendar year has the option of taking a corporate loan. A statement like this treats all employees equally. The "loan" is a loan, not an arbitrary contribution to an HSA.

[leevena]

Jmor, I agree with you. I know of many bank cards that have this feature of a loan.

Lee