HSA Contributions - Considered Comp or Excluded

[Guest glhotdog]

Client maintains a safe harbor 401(k) profit sharing plan.

Client maintains a Section 125 deferral plan.

Client offers an HSA that is not part of the Section 125 plan.

HSA contributions are excluded from considered compensation for 401(k) plan purposes.

Correct or incorrect?

Thanks.

[K2retire]

How does the document define plan compensation?

[austin3515]

If the HSA is done through an after tax-deduction, it should be completely ignored (I'm told these deductions are not always done through a 125 plan). The employee might as well be writing you a separate check for the HSA amounts. If the HSA is provided by EMPLOYER contributions (i.e., similar to employer paid health insurance) it should also be ignored.

Neither one of these would be affected by any "normal" definition of compensation.