Uniform Coverage Rule

[Guest able1951]

If an employer makes contributions to a health FSA, outside of employee payroll deductions, are the employer contributions subject to the uniform coverage rule? I have an employer who wants to make monthly contributions to an FSA.

[papogi]

When an employee elects to contribute money to an FSA, they are giving their money back to their employer. It becomes employer money, and that's the whole reason that FSAs enjoy favorable tax treatment under Sections 106 and ultimately, 105. Based on this, it is my opinion that monies from the employer would be treated the same as monies that the employee gives back to the employer, and the uniform coverage rule should apply.