Health Savings Account Blog

Jim Snyder, President of Great Lakes HSA and one of the leading authorities on HSA regulations, said “the final regs are a clear sign the Treasury is trying to make it easier for employers to adopt an HSA style health plan by giving them added flexibility when designing a HSA health program. This flexibility will translate into additional options for employees and higher enrollment rates for HSA plans in 2007.”

Jim highlighted some of the new features of the final regulations below:

• Collectively bargained employees receive an exception from the comparability regulations.
• The ability to make different comparable contributions based on different variations of family coverage.
• Eligible employees now have a right to elect to receive cash in lieu of all or a portion of an employer HSA
contribution,
• Employer contributions to the employee's HSA made through a cafeteria plan are excluded from the
comparability rules.
• An excise tax on an employer if it fails to make comparable contributions to employees' HSAs.

One of the most important aspects of the final regulations is the Treasury’s effort to clarify other HSA comparability issues through numerous examples that illustrate the application of the rules. “This is the first time I can remember when the Treasury issued final regulations that didn’t make the original regulations more complicated to understand and manage at the employer level. Once HR professionals digest the final HSA regs, I they will begin 2007 with a positive outlook on the future of HSA plans within their organization.

Jim also mentioned that employers who currently have a HSA plan in place and vary employer contributions by location, categories of coverage or employee group, should review their plan design to insure it meets the final comparability regulations. The regulations will apply to employer contributions made on or after January 1, 2007.

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