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August 25, 2005
JS-2692
Treasury and IRS Issue Proposed Regulations Concerning Health Savings Account Comparability Rules
WASHINGTON, DC -- Today the IRS and Treasury issued proposed regulations with respect to the comparability rules for employer Health Savings Account (HSA) contributions. The proposed regulations generally follow the previously issued guidance on comparability rules. The rules also provide additional clarification with respect to a few issues not previously addressed.
Unlike many other employer-provided tax-favored benefits, the HSA rules do not have nondiscrimination rules restricting the amount of benefits provided to highly compensated employees. Instead, the HSA statute requires that all employer pre-tax contributions to employee HSAs be comparable. That is, all employer contributions to employee HSAs must be the same amount or the same percentage of the High Deductible Health Plan (HDHP) deductible for all employees with the same category (self-only or family) of HDHP coverage. These rules, as provided in prior guidance, provide an exception from the comparability rules for employer contributions to HSAs made through cafeteria plans.
A copy of the proposed regulations is attached.
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