The Internal Revenue Service wants to keep employers from using the new health savings account programs to favor some employees over others.[@@]
The IRS has proposed regulations that would set guidelines requiring employers that contribute to HSAs to make comparable contributions for all workers in a given class of employees.
The HSA program lets individuals who buy high-deductible health coverage fund routine health care costs by deducting contributions to HSAs and excluding HSA distributions used to pay for health care from taxable income.
Employers can deduct HSA contributions from their own taxable income, but the HSA law imposes some restrictions on employer-sponsored HSA programs.
In the proposed regulations, the IRS says an employer must make “comparable contributions” to all members in a class of employees who join the employer’s HSA program. To make “comparable contributions,” the employer must contribute either the same amount of cash or the same percentage of the deductible to each HSA program participant’s HSA, Barbara Pie, an IRS tax exempt entities specialist, writes in a preamble to the proposed regulations.
The IRS is proposing a plain vanilla approach to employee classes.