Employer funding of HSA

[John Feldt ERPA CPC QPA]

A church's HDHP plan has a $5,000 deductible. They have one employee, the pastor, who is technically self-employed as pastor's generally are, but self-employed for tax withholding purposes.

The employer (the church) has adopted an HSA plan and has decided to contribute $5,000 toward that in 2013. Is this allowable? If so, how/when should the $5,000 be deposited into the HSA account? Can the employer deposit the entire $5,000 in January 2013? If they do, what issues could arise?

[leevena]

A church's HDHP plan has a $5,000 deductible. They have one employee, the pastor, who is technically self-employed as pastor's generally are, but self-employed for tax withholding purposes.

The employer (the church) has adopted an HSA plan and has decided to contribute $5,000 toward that in 2013. Is this allowable? If so, how/when should the $5,000 be deposited into the HSA account? Can the employer deposit the entire $5,000 in January 2013? If they do, what issues could arise?

2013 contributions are $3,100 individual and $6,250 family. The church can contribute in a variety of ways, pay as you go via paycheck, pre-fund, or look back. Does this answer your question?

[John Feldt ERPA CPC QPA]

Thank you - if the full amount is prefunded and the pastor is called away mid-year or dies, what happens to any unused employer funded HSA? Is the annual limit pro-rated?

[leevena]

Thank you - if the full amount is prefunded and the pastor is called away mid-year or dies, what happens to any unused employer funded HSA? Is the annual limit pro-rated?

Once paid, it belongs to the pastor. If dies, passes along as any other asset.