Infinisource Comments on Employer Comparable Contributions to Health Savings Accounts (HSAs) at IRS Hearing

Infinisource, Inc. was among several administrators and associations that presented oral comments at an IRS public hearing on Thursday, February 23, 2006, regarding employers’ comparable contributions to HSAs. The hearing was held on the Proposed Regulations issued under § 4980G that were published as a Notice of Proposed Rulemaking in the Federal Register on August 26, 2005.

In the brief time allotted, Infinisource comments were focused on five major areas where the proposed regulations could be improved to give employers greater flexibility in offering HSAs:

• Greater flexibility in coverage categories (beyond employee-only and family coverage)
• Greater flexibility in employee categories (to include union employees)
• Greater flexibility for employers with affiliated entities
• Greater flexibility for employers who specify a particular trustee
• Expansion of the cafeteria plan exception to the comparability rules

Other speakers were in agreement with Infinisource recommendations. While the IRS was encouraged to issue final regulations as soon as possible, preferably in advance of completing plan design for 2007, the IRS did not commit to when the regulations would be finalized.

Infinisource will continue to provide updates on any major developments related to HSAs and other benefits laws and regulations that impact your business.

If you are interested in reviewing a copy of the proposed regulations, you may download a copy at: www.irs.gov/pub/irs-regs/138647004.pdf

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