If employees are offered a Bronze HSA and a Silver Plan how much contribution can be paid to the HSA account so that everything is fair and not in violation of §2716 Salary Discrimination and the requirement to treat similarly situated individuals the same, under Health Care Reform?
***I assume the Silver Plan is a regular PPO (not an HSA) and employer is paying 99% of employee cost for either plan, which is clearly legal and non discriminatory where the contribution is concerned, the $100 contribution into the HSA plan for those folks electing that plan has nothing to do with it
Employee has a choice to go with an HSA with the $100 contribution or a regular PPO plan which of course has no contribution Reply from our wholesaler 7.12.2016
Internal Revenue Bulletin: 2008-29 Health Savings Accounts – Guidance
If an employee takes a Silver HSA, can the $100 contribution be used to pay premium instead?
Those taking a Silver HSA would have a different contribution based on the lowest priced Kaiser plan.
Excerpt from Publication 969
This section contains the rules that employers must follow if they decide to make HSAs available to their employees. Unlike the previous discussions, “you” refers to the employer and not to the employee.
Comparable contributions. If you decide to make contributions, you must make comparable contributions to all comparable participating employees’ HSAs. Your contributions are comparable if they are either:
- The same amount, or
- The same percentage of the annual deductible limit under the HDHP covering the employees.
The comparability rules don’t apply to contributions made through a cafeteria plan.
- Are covered by your HDHP and are eligible to establish an HSA,
- Have the same category of coverage (either self-only or family coverage), and
- Have the same category of employment (part-time, full-time, or former employees).
To meet the comparability requirements for eligible employees who have neither established an HSA by December 31 nor notified you that they have an HSA, you must meet a notice requirement and a contribution requirement. You will meet the notice requirement if by January 15 of the following calendar year you provide a written notice to all such employees. The notice must state that each eligible employee who, by the last day of February, establishes an HSA and notifies you that he or she has established an HSA will receive a comparable contribution to the HSA for the prior year. For a sample of the notice, see Regulations section 54.4980G-4 A-14(c). You will meet the contribution requirement for these employees if by April 18, 2017, you contribute comparable amounts plus reasonable interest to the employees’ HSA for the prior year.
Excerpt from Publication 502 allowable medical expenses
You can include in medical expenses insurance premiums you pay for policies that cover medical care. You can’t include in medical expenses insurance premiums that were paid and for which you are claiming a credit or deduction.
***In this case the employer is claiming a deduction under Section 106
Medical care policies can provide payment for treatment that includes:
- Hospitalization, surgical services, X-rays,
- Prescription drugs and insulin,
- Dental care,
- Replacement of lost or damaged contact lenses, and
- Long-term care (subject to additional limitations). See Qualified Long-Term Care Insurance Contracts under Long-Term Care, later.
If you have a policy that provides payments for other than medical care, you can include the premiums for the medical care part of the policy if the charge for the medical part is reasonable. The cost of the medical part must be separately stated in the insurance contract or given to you in a separate statement. IRS.gov