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Many employers offer high deductible health plans (HDHPs) to control premium costs and pair this coverage with health savings accounts (HSAs) to help employees with their health care expenses. An HSA is a tax-exempt trust or custodial account that can be contributed to by, or on behalf of, an eligible individual for the purpose of paying qualified medical expenses.
Employers are not required to contribute to the HSAs of their employees. However, if an employer makes contributions to any employee’s HSA outside of a cafeteria plan, the employer must make comparable contributions to the HSAs of all comparable participating employees. As a general rule, contributions are comparable if they are the same dollar amount or the same percentage of the HDHP deductible. An employer that fails to comply with comparability requirements may be liable for excise taxes.
This Compliance Overview provides general guidance for complying with the comparability rules when making contributions to employees’ HSAs.
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