Proposed Regulations Regarding HSAs

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The Internal Revenue Service (IRS) and the U.S. Treasury Department have issued Proposed Regulations regarding Health Savings Accounts (HSAs). The highlights are below:

  • A non-highly compensated employee (non-HCE) may receive a greater contribution than an HCE, but not vice-versa.
  • An employer that does not make comparable HSA contributions (applicable to HSAs outside of a cafeteria plan) would be subject to a 35% excise tax. The tax must be reported to the IRS on Form 8928.
  • An employer may limit the eligibility for an HSA rollover to those individuals covered under the employer’s high deductible health plan (HDHP).
  • The regulations are not effective until final regulations are published. However, the proposed regulations may be relayed upon for guidance in the interim for plan years beginning on or after January 1, 2007.
  • Click here for more information (PDF)

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