Compliance Watch: HSA

  • Employer W-2 Preparation for HSAs

    Employers are required to report all employer Health Savings Account (HSA) contributions and employee pre-taxed HSA contributions on the W-2.

  • HSA Contribution and Coverage Limits for 2018

    The 2018 HSA contribution and coverage limits have been announced.

  • IRS Explains When Mistaken HSA Employer Contributions Can be Returned

    The IRS has provided a letter which contains seven examples of when mistaken employer contributions made to an employee’s HSA can be returned to the employer. The letter states that the circumstances outlined in IRS Notice 2008-59 are not the only circumstances where the return of a mistaken employer contribution to an HSA can be made. Although this letter provides the IRS’s viewpoint on this topic, it is not considered official guidance. 

  • Health Savings Account Eligibility for Veterans

    Beginning in 2016, individuals receiving VA medical benefits for a “service-connected disability” will be considered HSA-eligible individuals. However, the three-month rule will still apply to individuals receiving VA-administered care for any other condition. This three-month rule makes individuals ineligible to make HSA contributions for any month if they received VA-administered care at any time during the previous three months.

  • Employer W-2 Preparation for Health Savings Accounts

    Employers are required to report all employer HSA contributions and employee pre-taxed HSA contributions on the W-2, Box 12, which should be marked with the letter “W”. This number should reflect any tax-free contributions to your employee’s HSA.If an employee has made or received any after-tax contributions, these should not be noted on the W-2. Employees who made after-tax contributions will receive an “above-the-line” deduction when filing their 1040.

  • Cadillac Tax and FSA, HRA & HSA Plans

    Beginning in 2018 {now delayed until 2020 under the Consolidated Appropriations Act, 2016} healthcare reform will require employers to pay an excise tax on certain high cost employer-sponsored health coverage. Thus, this tax will apply to coverage provided in 2019 and is payable in 2020. This tax is referred to as the Cadillac tax.

  • HSA Eligibility and Medicare

    An individual who is entitled to Medicare is not HSA eligible and may not contribute to an HSA or have others contribute to an HSA on their behalf. An individual generally must be both eligible and enrolled to be entitled to Medicare. For some individuals Medicare enrollment is automatic, whereas for others, they are eligible for Medicare but must file an application in order to be entitled to benefits.