Compliance Office
What you need to know
Can an employer make a different contribution for a family-plan QHDHP vs. a single-plan?
Yes. The HSA comparable contributions rules for contributions done outside a section 125 cafeteria plan allow the employer to vary their HSA contribution based on the employee’s coverage level between single (employee only) and “other than single" coverage (2-party, family, etc.).
The employer has more flexibility in contribution funding options if the employer HSA contributions are done through a section 125 cafeteria plan. Under IRS guidelines, The Tax Relief and Health Care Act of 2006 allows employers to make larger HSA contributions for a non-highly-compensated employee than for a highly-compensated employee. A highly- compensated employee for 2017 is an employee who meets either of the following tests:
- The employee was a 5% owner at any time during the year or the preceding year.
- The employee received more than $120,000 in pay for the preceding year.
You can choose to ignore test 2 if the employee was not also in the top 20% of employees when ranked by pay for the preceding year.
Partnerships and S corporations: Partners and 2% shareholders of an S corporation are not eligible for salary reduction (pre-tax) contributions to an HSA. Employer contributions to the HSA of a bona fide partner or 2% shareholder are treated as distributions or guaranteed payments as determined by the facts and circumstances.
Cafeteria plans: You may contribute to an employee’s HSA using a cafeteria plan and your contributions are not subject to the statutory comparability rules. However, cafeteria plan nondiscrimination rules still apply. For example, contributions under a cafeteria plan to employee HSAs cannot be greater for higher-paid employees than they are for lower-paid employees. Contributions that favor lower-paid employees are prohibited.
![](https://cdhpcoach.com/wp-content/uploads/2017/06/coaches-short.png)
Coaches' Takeaway
Yes. An employer has more flexibility in contribution funding options if the employer HSA contributions are done through a section 125 cafeteria plan.
![](https://cdhpcoach.com/wp-content/uploads/2017/06/settings-2-70x70.png)
Tools & Resources
CDHPCoach’s Storage Facility, where the Coach has organized and compiled a vast amount of tools and resources for you to access.
![](https://cdhpcoach.com/wp-content/uploads/2017/06/037-newspaper-70x70.png)
Library
Housed here are key components and information within the book, Bend the Healthcare Trend which was the impetus behind the CDHPCoach.
Compliance Office
What you need to know