March 21, 2024
HSAs are useful but sometimes confusing. This employee benefit tool comes with a myriad of compliance rules. In this webinar, we clarified eligibility rules, discussed the mechanics of HSA contributions, and learned to identify and remedy some common issues associated with HSAs.
Agenda
- Overview of Health Savings Accounts (HSAs)
- Eligibility
- Contributions
- Distributions
- Tax Reporting
- Compliance Takeaways
- FAQs and Compliance Nuances (throughout)
Key Takeaways
Employer Considerations
- HSAs can lower health plan costs for employers and provide significant federal tax savings for employers and employees.
- Employers should plan proactively when implementing HSAs for the first time. Midyear introduction is generally not advisable.
- Coordination with the HSA custodian/vendor is important to ensure account set up process and employee communications are clear.
- Employees are responsible for compliance with eligibility, contribution, and distribution rules and may need education on the requirements.
- BUT employers offering HSAs through a cafeteria plan must verify the employees are covered by an HDHP and do not have other impermissible coverage (e.g., health FSA) with the employer.
- Employers should consider funding any employer contributions throughout the year rather than in a lump sum and have a written contribution policy.
- Employers should be aware of the Section 125 nondiscrimination rules and the advantages of midyear testing to prevent test failures.
NFP Resources
For further information about HSAs, please ask your broker or consultant for a copy of the NFP publication Health Savings Accounts: A Guide for Employers and the HSA Resources and Corrective Actions Toolkit.