In final regulations issued, and effective, Tuesday, Sept. 8th., the Internal Revenue Service hopes to make it easier for employers to follow the rules for making comparable contributions to employees' health savings accounts (HSAs) -- as well as meet the consequences of breaking them.
Similar to rules proposed in July 2008, the final regulations provide that employer contributions to the HSAs of non highly compensated employees (NHCEs) may be larger than employer contributions to the HSAs of highly-compensated employees (HCEs) with comparable coverage during a period.
However, employer contributions to the HSAs of highly-compensated employees may not exceed employer contributions to the HSAs of non highly-compensated employees with comparable coverage during a period, under the final rule.
The rule (T.D. 9457) also spells out how an employer should pay the excise taxes it owes if it fails to correctly follow the comparable contribution rules.
The rules were published in the Sept. 8, 2009 Federal Register (74 Fed. Reg. 45994)