1. 45994 Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Rules and Regulations
governmental plans which are rendered plan described in § 1.457–2(f), is treated DEPARTMENT OF THE TREASURY
superfluous with this change. as having complied with section
401(a)(9) for all years to which section Internal Revenue Service
Effective/Applicability Date
401(a)(9) applies to the plan if the plan
These regulations are effective on complies with a reasonable and good 26 CFR Part 54
September 8, 2009 and apply to all plan faith interpretation of section 401(a)(9). [TD 9457]
years to which section 401(a)(9) applies.
§ 1.401(a)(9)–6 [Amended] RIN 1545–BG71
Special Analyses
It has been determined that these final ■ Par. 3. Section 1.401(a)(9)–6 is Employer Comparable Contributions to
regulations are not a significant amended by: Health Savings Accounts Under
regulatory action as defined in ■ 1. Removing Q&A–16.
Section 4980G, and Requirement of
Executive Order 12866. Therefore, a Return for Filing of the Excise Tax
■ 2. Redesignating Q&A–17 as Q&A–16. Under Section 4980B, 4980D, 4980E or
regulatory assessment is not required. It
also has been determined that section ■ 3. Removing the word ‘‘A–16’’ and 4980G
553(b) of the Administrative Procedure adding ‘‘A–15’’ in the newly-designated
AGENCY: Internal Revenue Service (IRS),
Act (5 U.S.C. chapter 5) does not apply A–16. Treasury.
to these regulations, and, because ■ 4. Removing the last sentence of the ACTION: Final regulations.
§§ 1.401(a)(9)–1 and 1.403(b)–6 do not newly-designated A–16.
impose a collection of information on SUMMARY: This document contains final
small entities, the Regulatory Flexibility ■ Par. 4. Section 1.403(b)–6 is amended regulations providing guidance on
Act (5 U.S.C. chapter 6) does not apply. by: employer comparable contributions to
Pursuant to section 7805(f) of the Code, ■ 1. Revising the last sentence of Health Savings Accounts (HSAs) under
the notice of proposed rulemaking paragraph (e)(2). section 4980G of the Internal Revenue
preceding these regulations was Code (Code) as amended by sections
■ 2. Adding a new paragraph (e)(8).
submitted to the Chief Counsel for 302, 305 and 306 of the Tax Relief and
Advocacy of the Small Business The revisions and addition are as Health Care Act of 2006 (the Act). The
Administration for comment on its follows: final regulations also provide guidance
impact on small business. relating to the manner and method of
§ 1.403(b)–6 Timing of distributions and
Drafting Information benefits. reporting and paying the excise tax
under sections 4980B, 4980D, 4980E,
The principal authors of these * * * * * and 4980G of the Code. These final
regulations are Michael P. Brewer and (e) Minimum required distributions regulations would affect employers that
Cathy V. Pastor, Office of Division for eligible plans. contribute to employees’ HSAs and
Counsel/Associate Chief Counsel (Tax Archer MSAs, employers or employee
Exempt and Government Entities). * * * * *
organizations that sponsor a group
However, other personnel from the IRS (2) * * * Consequently, except as health plan, and certain third parties
and the Treasury Department otherwise provided in this paragraph such as insurance companies or HMOs
participated in the development of these (e), the distribution rules in section or third-party administrators who are
regulations. 401(a)(9) are applied to section 403(b) responsible for providing benefits under
List of Subjects in 26 CFR Part 1 contracts in accordance with the the plan.
provisions in § 1.408–8 for purposes of DATES: Effective date. These regulations
Income taxes, Reporting and determining required minimum
recordkeeping requirements. are effective on September 8, 2009.
distributions. Applicability date. The sections of
Adoption of Amendments to the * * * * * these regulations that provide guidance
Regulations on employer comparable contributions
(8) Special rule for governmental
■Accordingly, 26 CFR part 1 is plans. A section 403(b) contract that is to HSAs under section 4980G apply to
amended as follows: part of a governmental plan (within the employer contributions made on or after
meaning of section 414(d)) is treated as January 1, 2010. The sections of these
PART 1—INCOME TAXES regulations that provide guidance
having complied with section 401(a)(9)
relating to the excise tax under sections
■ Paragraph 1. The authority citation for all years to which section 401(a)(9)
4980B, 4980D, 4980E and 4980G apply
for part 1 continues to read in part as applies to the contract, if the contract to any Form 8928 that is due on or after
follows: complies with a reasonable and good January 1, 2010.
Authority: 26 U.S.C. 7805 * * * faith interpretation of section 401(a)(9).
FOR FURTHER INFORMATION CONTACT:
* * * * * Concerning the final regulations as they
■ Par. 2. Section 1.401(a)(9)–1 is
amended by adding a new paragraph (d) Linda E. Stiff, relate to sections 4980E or 4980G,
to A–2 as follows: Mireille Khoury at (202) 622–6080; and
Deputy Commissioner for Services and
concerning the final regulations as they
Enforcement.
§ 1.401(a)(9)–1 Minimum distribution relate to section 4980B or 4980D, Russ
CPrice-Sewell on DSKGBLS3C1PROD with RULES
requirement in general. Approved: August 20, 2009. Weinheimer at (202) 622–6080 (not toll-
* * * * * Michael Mundaca, free numbers).
A–2. * * * Acting Assistant Secretary of the Treasury SUPPLEMENTARY INFORMATION:
(d) Special rule for governmental (Tax Policy).
plans. Notwithstanding anything to the [FR Doc. E9–21453 Filed 9–4–09; 8:45 am]
Paperwork Reduction Act
contrary in this A–2, a governmental BILLING CODE 4830–01–P The collection of information
plan (within the meaning of section contained in these regulations has been
414(d)), or an eligible governmental reviewed and approved by the Office of
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2. Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Rules and Regulations 45995
Management and Budget in accordance maintained by an employer with 20 or comparability rules that allows, but
with the Paperwork Reduction Act of more employees must comply with does not require, employers to make
1995 (44 U.S.C. 3507(d)), under control continuation coverage requirements. If a larger contributions to the HSAs of
number 1545–2146. The collection of plan does not satisfy these nonhighly compensated employees than
information in these final regulations is requirements, an excise tax is imposed the employer makes to the HSAs of
in § 54.6011–2. The collection of of $100 per day per affected beneficiary. highly compensated employees. The
information results from the Final regulations under section 4980B final regulations address this exception
requirement to file a return for the have been published, including to comparability in § 54.4980G–4 and
payment of the excise tax under section provisions concerning the excise tax, provide that employer contributions to
4980B, 4980D, 4980E, or 4980G of the but no return filing requirement has the HSAs of nonhighly compensated
Code. The likely respondents are previously been imposed. See employees may be larger than employer
employers that contribute to employees’ § 54.4980B–2, Q&A–9 and Q&A–10. contributions to the HSAs of highly
HSAs and Archer MSAs, employers or Moreover, under chapter 100 of the compensated employees with
employee organizations that sponsor a Code, group health plans must comply comparable coverage during a period.
group health plan, and certain third with various requirements, including Conversely, employer contributions to
parties such as insurance companies or limitations on preexisting condition the HSAs of highly compensated
HMOs or third-party administrators who exclusions, certification of creditable employees may not exceed employer
are responsible for providing benefits coverage, special enrollments, contributions to the HSAs of nonhighly
under the plan. prohibitions against discrimination compensated employees with
An agency may not conduct or based on a health factor (including comparable coverage during a period.
sponsor, and a person is not required to genetic information), parity between The comparability rules still apply
respond to, a collection of information mental health benefits and medical/ with respect to contributions to the
unless it displays a valid control surgical benefits, minimum hospital HSAs of all nonhighly compensated
number assigned by the Office of lengths of stay in connection with employees who are comparable
Management and Budget. Books or childbirth, and continued coverage for participating employees (eligible
records relating to a collection of post-secondary students with a serious individuals who are in the same
information must be retained as long as medical condition. If a plan does not category of employees with the same
their contents might become material in satisfy any of these requirements under category of high deductible health plan
the administration of any internal chapter 100, section 4980D imposes an (HDHP) coverage) and an employer
revenue law. Generally, tax returns and excise tax of $100 per day per affected must make comparable contributions to
tax return information are confidential, individual. Regulations interpreting the the HSA of each nonhighly
as required by 26 U.S.C. 6103. substantive requirements of chapter 100 compensated employee who is a
have previously been published, but no comparable participating employee
Background
regulations have been published during the calendar year. Similarly, the
This document contains final comparability rules still apply with
amendments to the Excise Tax concerning the excise tax under section
4980D. respect to contributions to the HSAs of
Regulations (26 CFR part 54) under all highly compensated employees who
On July 16, 2008, proposed
section 4980G of the Code, as amended are comparable participating employees
regulations (REG–120476–07) were
by Sections 302 and 305 of the Tax and an employer must make comparable
published in the Federal Register (73
Relief and Health Care Act of 2006 (the contributions to the HSA of each highly
Act), Public Law 109–432, under FR 40793) addressing comparable
contributions to nonhighly compensated compensated employee who is a
paragraph (d) of section 4980G of the comparable participating employee
Code, as enacted by section 306 of the employees. The proposed regulations
also provided guidance for employers during the calendar year. Collectively
Act, and under Section 4980E of the bargained employees are disregarded for
Code. that offer qualified HSA distributions
and for employers that make the purposes of section 4980G, as are HSA
Under section 4980G, an excise tax is contributions made through a cafeteria
imposed on an employer that fails to maximum annual HSA contribution on
behalf of all employees who are eligible plan.
make comparable contributions to the For purposes of section 4980G(d),
HSAs of its employees. On July 31, individuals on the first day of the last
highly compensated employee is
2006, final regulations on comparability month of the employees’ taxable year.
defined under section 414(q) and
were published in the Federal Register, Finally, the proposed regulations
includes any employee who was (1) a
72 FR 30501 (2007–26 IRB 1495), TD provided guidance on the requirement
five-percent owner at any time during
9277. In addition, on April 17, 2008, of a return to accompany payment of the
the year or the preceding year; or (2) for
final regulations were published in the excise taxes under sections 4980B,
the preceding year, (A) had
Federal Register, 73 FR 20794 (2008–20 4980D, 4980E, and 4980G and the time
compensation from the employer in
IRB 975), TD 9393, providing guidance for filing that return. These final
excess of $110,000 (for 2009, indexed
on employer comparable contributions regulations adopt the provisions of the
for inflation) and (B) if elected by the
to HSAs in instances where an proposed regulations without
employer, was in the group consisting of
employee has not established an HSA substantive revision. The final
the top 20 percent of employees when
by December 31st and in instances regulations make certain minor
ranked based on compensation.
where an employer accelerates clarifying changes to the rules of the
Nonhighly compensated employees are
CPrice-Sewell on DSKGBLS3C1PROD with RULES
contributions for the calendar year for proposed regulations.
employees that are not highly
employees who have incurred qualified Explanation of Provisions and compensated employees.
medical expenses. See § 601.601(d)(2). Summary of Comments
This document also contains final Maximum HSA Contribution Permitted
amendments to the Excise Tax Special Rule for Contributions to for Employees Who Become Eligible
Regulations (26 CFR part 54) under Nonhighly Compensated Employees Individuals Mid-Year
sections 4980B and 4980D. Under Paragraph (d) of section 4980G Section 305 of the Act provides that
section 4980B, group health plans provides an exception to the individuals who are eligible individuals
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3. 45996 Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Rules and Regulations
on the first day of the last month of the qualified HSA distribution is a direct Two comments were received
employees’ taxable year (December 1 for distribution of an amount from a health regarding the reporting and filing of the
calendar year taxpayers) may make or flexible spending arrangement (health excise taxes under sections 4980B,
have made on their behalf the maximum FSA) or a health reimbursement 4980D, 4980E, and 4980G. One
annual HSA contribution based on their arrangement (HRA) to an HSA. The commentator was concerned that the
HDHP coverage (self only or family) on distribution must not exceed the lesser noncompliance period under section
that date. A portion of the contribution of the balance in the health FSA or HRA 4980B or 4980D could extend beyond
is included in income and subject to an on September 21, 2006, or as of the date the due date for filing the excise tax
additional 10 percent tax if the of the distribution. Section 54.4980G–7 return and suggested that the due date
individual fails to remain an eligible of the final regulations provides that ifbe extended to 90 days after the end of
individual for 12 months after the last an employer offers qualified HSA the noncompliance period. It is true that
month of the taxable year. See section distributions to any employee who is an the noncompliance period under section
223(b)(8). Section 54.4980G–6 of the eligible individual covered under any 4980B, for example, could extend over
final regulations provides that the HDHP, the employer must offer four or more taxable years of the person
employer can contribute up to this qualified HSA distributions to all responsible for payment of the tax.
maximum contribution on behalf of all employees who are eligible individuals Therefore, extending the due date until
employees who are eligible individuals covered under any HDHP. However, an 90 days after the end of the
on the first day of the last month of the employer that offers qualified HSA noncompliance period would in some
employees’ taxable year (December 1 for distributions only to employees who are cases defer the obligation to pay the
calendar year taxpayers), including eligible individuals covered under the excise tax for over four years, which
employees who became eligible employer’s HDHP is not required to would not be in the interest of sound tax
individuals after January 1st of the offer qualified HSA distributions to administration. As such, the final
calendar year and eligible individuals employees who are eligible individuals regulations do not adopt this change.
who were hired after January 1st of the but are not covered under the Another commentator noted that the
calendar year (both such classes of employer’s HDHP. excise tax might be due before the
individuals are hereinafter referred to as person responsible for paying it had
Reporting and Payment of the Excise even discovered that a failure under
‘‘mid-year eligible individuals’’). An
Tax Under Section 4980B, 4980D, 4980E section 4980B or 4980D had occurred.
employer who makes the maximum
or 4980G However, this concern is mitigated by
calendar year HSA contribution, or who
contributes more than a pro-rata The regulations prescribe the manner the fact that sections 4980B and 4980D
amount, on behalf of employees who are and method of paying the excise taxes provide that the excise tax does not
mid-year eligible individuals will not imposed under section 4980B, 4980D, apply for any period for which the
fail to satisfy comparability merely 4980E, or 4980G. The final regulations, responsible party did not know, or
because some employees will have like the proposed regulations, provide exercising reasonable diligence would
received more contributions on a that these excise taxes must be reported not have known, that the failure existed.
monthly basis than employees who on Form 8928, ‘‘Return of Certain Excise Also, under sections 4980B and 4980D,
worked the entire calendar year. Taxes Under Chapter 43 of the Internal the excise tax does not apply if the
Employers are not required to make Revenue Code.’’ The excise tax under failure is corrected (that is, the failure is
these greater than pro-rata contributions section 4980B, 4980D, 4980E or 4980G retroactively undone to the extent
and may instead pro-rate contributions must be paid at the time prescribed for possible and the affected beneficiary is
based on the number of months that an filing of the excise tax return (without placed in a financial position as good as
individual was both employed by the extensions). With respect to the excise the beneficiary would have been had the
employer and an eligible individual. tax under section 4980B or 4980D for failure not occurred).
However, if an employer contributes employers and third parties such as Finally, a commentator also stated
more than the monthly pro-rata amount insurers or third party administrators, that there are some uncertainties about
for the calendar year to the HSA of any the return is due on or before the due the application of the excise tax rules to
employee who is a mid-year eligible date for filing the person’s Federal various situations that could arise under
individual, the employer must then income tax return. An extension to file section 4980B. The commentator
contribute, on an equal and uniform the person’s income tax return does not suggested that the filing and payment
basis, a greater than pro-rata amount to extend the date for filing Form 8928. requirement for the excise tax under
the HSAs of all comparable With respect to the excise tax under section 4980B should not apply until
participating employees who are mid- section 4980B or 4980D for additional guidance was issued that
year eligible individuals. Likewise, if multiemployer or specified multiple addressed these uncertainties. The
the employer contributes the maximum employer health plans, the return is due Treasury Department and the IRS
annual contribution amount for the on or before the last day of the seventh believe that the statutory and regulatory
calendar year to the HSA of any month after the end of the plan year. provisions in this area provide
employee who is a mid-year eligible Finally, with respect to the excise tax appropriate guidance. Therefore, the
individual, the employer must under section 4980E or 4980G for final regulations do not adopt this
contribute that same amount to the noncomparable contributions, the return comment.
HSAs of all comparable participating is due on or before the 15th day of the The guidance in the proposed
employees who are mid-year eligible fourth month following the calendar regulations relating to the excise taxes
CPrice-Sewell on DSKGBLS3C1PROD with RULES
individuals. year in which the noncomparable imposed under section 4980B, 4980D,
contributions were made. The final 4980E, or 4980G was contained in Q &
Special Comparability Rules for regulations also provide guidance A–11 in § 4980B–2, Q & A–1 in
Qualified HSA Distributions regarding the place for filing these § 4980D–1, Q & A–1 in § 4980E–1, and
Section 302(a) of the Act provides for excise tax returns, the signing of these Q & A–5 in § 4980G–1. The final
qualified HSA distributions. See section excise returns, and the time and place regulations provide additional clarifying
106(e) and Notice 2007–22 (2007–10 for paying the tax shown on such information relating to the guidance
IRB 670). See § 601.601(d)(2). A returns. previously provided in these Q &As,
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4. Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Rules and Regulations 45997
and the final regulations also Authority: 26 U.S.C. 7805 * * * (c) Due date for filing of return by
consolidate this guidance by including Section 54.4980G–6 also issued under 26 multiemployer plans or multiple
it under the following sections: U.S.C. 4980G. employer health plans. See § 54.6071–
§§ 54.6011–2, 54.6061–1, 54.6071–1, Section 54.4980G–7 also issued under 26 1(b)(2).
U.S.C. 4980G. * * *
54.6091–1 and 54.6151–1. (d) Effective/applicability date. In the
■ Par. 2. Section 54.4980B–0 is case of an employer or other person
Effective/Applicability Date
amended by adding a new Q–11 to mentioned in paragraph (b) of this Q &
The sections of these regulations that § 54.4980B–2 in the list of questions to A–1, the rules in this Q & A–1 are
provide guidance on employer read as follows: effective for taxable years beginning on
comparable contributions to HSAs or after January 1, 2010. In the case of
under section 4980G apply to employer § 54.4980B–0 Table of contents. a plan mentioned in paragraph (c) of
contributions made on or after January * * * * * this Q & A–1, the rules in this Q & A–
1, 2010. 1 are effective for plan years beginning
The sections of these regulations that List of Questions
on or after January 1, 2010.
provide guidance relating to the excise * * * * * ■ Par. 5. Section 54.4980E–1 is added to
tax under sections 4980B, 4980D, 4980E
§ 54.4980B–2 Plans that must comply. read as follows:
and 4980G apply to any Form 8928 that
is due on or after January 1, 2010. * * * * * § 54.4980E–1 Requirement of return and
Q–11: If a person is liable for the time for filing of the excise tax under
Special Analyses excise tax under section 4980B, what section 4980E.
It has been determined that this form must the person file and what is Q–1: If a person is liable for the excise
Treasury Decision is not a significant the due date for the filing and payment tax under section 4980E, what form
regulatory action as defined in of the excise tax? must the person file and what is the due
Executive Order 12866. Therefore, a * * * * * date for the filing and payment of the
regulatory assessment is not required. It excise tax?
also has been determined that section ■ Par. 3. Section 54.4980B–2 is A–1: (a) In general. See §§ 54.6011–2,
553(b) of the Administrative Procedure amended by adding a new Q&A–11 to 54.6151–1 and 54.6071–1(c).
Act (5 U.S.C. chapter 5) does not apply read as follows: (b) Effective/applicability date. The
to these regulations. It is hereby rules in this Q & A–1 are effective for
§ 54.4980B–2 Plans that must comply.
certified that the collection of plan years beginning on or after January
information in these regulations will not * * * * *
Q–11: If a person is liable for the 1, 2010.
have a significant economic impact on ■ Par. 6. Section 54.4980G–1 is
a substantial number of small entities. excise tax under section 4980B, what
form must the person file and what is amended by:
Therefore, a Regulatory Flexibility ■ 1. Revising the last sentence in A–1
Analysis under the Regulatory the due date for the filing and payment
of the excise tax? and adding a new sentence at the end
Flexibility Act (5 U.S.C. chapter 6) is of paragraph (a) in A–2.
A–11: (a) In general. See §§ 54.6011–
not required. Pursuant to section 7805(f) ■ 2. Adding a new Q & A–5.
2 and 54.6151–1.
of the Code, the notice of proposed The revisions and addition read as
(b) Due date for filing of return by
rulemaking preceding this regulation follows:
employers or other persons responsible
was submitted to the Chief Counsel for
for benefits under a group health plan. § 54.4980G–1 Failure of employer to make
Advocacy of the Small Business
See § 54.6071–1(a)(1). comparable health savings account
Administration for comment on its (c) Due date for filing of return by contributions.
impact on small business. multiemployer plans. See § 54.6071– * * * * *
Drafting Information 1(a)(2). A–1: * * * But see Q & A–6 in
(d) Effective/applicability date. In the § 54.4980G–3 for treatment of
The principal authors of these final
case of an employer or other person collectively bargained employees and Q
regulations are Mireille Khoury and
mentioned in paragraph (b) of this Q & & A–1 in § 54.4980G–6 for the rules
Russ Weinheimer, Office of Division
A–11, the rules in this Q & A–11 are allowing larger comparable
Counsel/Associate Chief Counsel (Tax
effective for taxable years beginning on contributions to nonhighly compensated
Exempt and Government Entities),
or after January 1, 2010. In the case of employees.
Internal Revenue Service. However,
a plan mentioned in paragraph (c) of
personnel from other offices of the IRS * * * * *
this Q & A–11, the rules in this Q & A–
and Treasury Department participated A–2: (a) * * * See also § 54.4980G–6
11 are effective for plan years beginning
in their development. for the rules allowing larger comparable
on or after January 1, 2010.
List of Subjects in 26 CFR Part 54 contributions to nonhighly compensated
■ Par. 4. Section 54.4980D–1 is added
employees.
Excise taxes, Pensions, Reporting and to read as follows:
* * * * *
recordkeeping requirements. Q–5: If a person is liable for the excise
§ 54.4980D–1 Requirement of return and
Adoption of Amendment to the time for filing of the excise tax under tax under section 4980G, what form
Regulations section 4980D. must the person file and what is the due
Q–1: If a person is liable for the excise date for the filing and payment of the
CPrice-Sewell on DSKGBLS3C1PROD with RULES
■Accordingly, 26 CFR part 54 is tax under section 4980D, what form excise tax?
amended as follows: must the person file and what is the due A–5: (a) In general. §§ 54.6011–2,
PART 54—PENSION EXCISE TAXES date for the filing and payment of the 54.6151–1 and 54.6071–1(d).
excise tax? (b) Effective/applicability date. The
■ Paragraph 1. The authority citation A–1: (a) In general. See §§ 54.6011–2 rules in this Q & A–5 are effective for
for part 54 is amended by adding entries and 54.6151–1. employer contributions made for
in numerical order to read in part as (b) Due date for filing of return by calendar years beginning on or after
follows: employers. See § 54.6071–1(b)(1). January 1, 2010.
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5. 45998 Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Rules and Regulations
■ Par. 7. Section 54.4980G–3 is made on behalf of an eligible individual 2010, Employer G contributes $1,000 to the
amended by: who is hired after January 1st or an HSA of Employee B. Employer Q does not
■ 1. Revising the section heading. employee who becomes an eligible make any other contributions for the 2010
■ 2. Revising the introductory text in individual after January 1st. Employers calendar year. Employer Q’s contributions
satisfy the comparability rules.
paragraph (a) of A–5. are not required to provide more than a Example 2. For the 2010 calendar year,
■ 3. Adding a new sentence at the end pro-rata contribution based on the Employer R only has two employees,
of paragraph (c) of A–5 and paragraph number of months that an individual Employee C and Employee D. Employee C,
(a) of A–9. was an eligible individual and an eligible individual with family HDHP
The revision and additions read as employed by the employer during the coverage, works for Employer R for the entire
follows: year. However, if an employer calendar year. Employee D, an eligible
contributes more than a pro-rata amount individual with family HDHP coverage works
§ 54.4980G–3 Failure of employer to make for Employer R from July 1st through
comparable health savings account
for the calendar year to the HSA of any
eligible individual who is hired after December 31st. Employer R contributes
contributions. $1,200 for the calendar year to the HSA of
January 1st of the calendar year or any Employee C and $600 to the HSA of
* * * * *
employee who becomes an eligible Employee D. Employer R does not make any
A–5: (a) Categories. The categories of
individual any time after January 1st of other contributions for the 2010 calendar
employees for comparability testing are
the calendar year, the employer must year. Employer R’s contributions satisfy the
as follows (but see Q & A–6 of this
contribute that same amount on an comparability rules.
section for the treatment of collectively
equal and uniform basis to the HSAs of (j) Effective/applicability date. The
bargained employees and Q & A–1 of
all comparable participating employees rules in paragraphs (h) and (i) of Q & A–
§ 54.4980G–6 for a special rule for
(as defined in Q & A–1 in § 54.4980G– 2 are effective for employer
contributions made to the HSAs of
1) who are hired or become eligible contributions made for calendar years
nonhighly compensated employees)—
individuals after January 1st of the beginning on or after January 1, 2010.
* * * * * calendar year. Likewise, if an employer
(c) * * * But see § 54.4980G–6 for a contributes the maximum annual * * * * *
special rule for contributions made to contribution amount for the calendar ■ Par. 9. Section 54.4980G–6 is added
the HSAs of nonhighly compensated year to the HSA of any eligible to read as follows:
employees. individual who is hired after January 1st § 54.4980G–6 Special rule for
* * * * * of the calendar year or any employee contributions made to the HSAs of
A–9: (a) * * * See § 54.4980G–6 for a who becomes an eligible individual any nonhighly compensated employees.
special rule for contributions made to time after January 1st of the calendar Q–1: May an employer make larger
the HSAs of nonhighly compensated year, the employer must contribute the contributions to the HSAs of nonhighly
employees. maximum annual contribution amount compensated employees than to the
* * * * * on an equal and uniform basis to the HSAs of highly compensated
■ Par. 8. Section 54.4980G–4 is HSAs of all comparable participating employees?
amended by: employees (as defined in Q & A–1 in A–1: Yes. Employers may make larger
■ 1. Adding a new sentence at the end § 54.4980G–1) who are hired or become HSA contributions for nonhighly
of paragraph (a) of A–1. eligible individuals after January 1st of compensated employees who are
■ 2. Adding paragraphs (h), (i) and (j) to the calendar year. An employer who comparable participating employees
A–2. makes the maximum calendar year than for highly compensated employees
The additions read as follows: contribution or more than a pro-rata who are comparable participating
contribution to the HSAs of employees employees. See Q & A–1 in § 54.4980G–
§ 54.4980G–4 Calculating comparable who become eligible individuals after
contributions.
1 for the definition of comparable
the first day of the calendar year or participating employee. For purposes of
* * * * * eligible individuals who are hired after this section, highly compensated
A–1: (a) * * * But see Q & A–1 of the first day of the calendar year will employee is defined under section
§ 54.4980G–6 for a special rule for not fail to satisfy comparability merely 414(q). Nonhighly compensated
contributions made to the HSAs of because some employees will have employees are employees that are not
nonhighly compensated employees. received more contributions on a highly compensated employees. The
* * * * * monthly basis than employees who comparability rules continue to apply
A–2: * * * worked the entire calendar year. with respect to contributions to the
* * * * * (i) Examples. The following examples HSAs of all nonhighly compensated
(h) Maximum contribution permitted illustrate the rules in paragraph (h) in employees. Employers must make
for all employees who are eligible this Q & A–2. In the following examples, comparable contributions for the
individuals during the last month of the no contributions are made through a calendar year to the HSA of each
taxable year. An employer may section 125 cafeteria plan and none of nonhighly compensated employee who
contribute up to the maximum annual the employees are covered by a is a comparable participating employee.
contribution amount for the calendar collective bargaining agreement. Q–2: May an employer make larger
year (based on the employees’ HDHP Example 1. On January 1, 2010, Employer contributions to the HSAs of highly
coverage) to the HSAs of all employees Q contributes $1,000 for the calendar year to compensated employees than to the
CPrice-Sewell on DSKGBLS3C1PROD with RULES
who are eligible individuals on the first the HSAs of employees who are eligible HSAs of nonhighly compensated
day of the last month of the employees’ individuals with family HDHP coverage. In employees?
taxable year, including employees who mid-March of the same year, Employer Q A–2: (a) In general. No. Employer
hires Employee A, an eligible individual with
worked for the employer for less than family HDHP coverage. On April 1, 2010,
contributions to HSAs for highly
the entire calendar year and employees Employer Q contributes $1,000 to the HSA of compensated employees who are
who became eligible individuals after Employee A. In September of the same year, comparable participating employees
January 1st of the calendar year. For Employee B becomes an eligible individual may not be larger than employer HSA
example, such contribution may be with family HDHP coverage. On October 1, contributions for nonhighly
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6. Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Rules and Regulations 45999
compensated employees who are HSA contributions for calendar year 2010 do employee who is an eligible individual with
comparable participating employees. not satisfy the comparability rules. self plus two HDHP coverage. The deductible
The comparability rules continue to Example 5. In 2010, Employer E for both the self plus one HDHP and the self
contributes $1,000 for the calendar year to plus two HDHP is $2,000. Employee A, an
apply with respect to contributions to
the HSA of each full-time non-management eligible individual, is a nonhighly
the HSAs of all highly compensated nonhighly compensated employee who is an compensated employee with self plus one
employees. Employers must make eligible individual with family HDHP coverage. Employee B, an eligible individual,
comparable contributions for the coverage. Employer E also contributes $500 is a highly compensated employee with self
calendar year to the HSA of each highly for the calendar year to the HSA of each full- plus two coverage. For the 2010 calendar
compensated comparable participating time management nonhighly compensated year, Employer F contributes $1,000 to
employee. See Q & A–1 in § 54.4980G– employee who is an eligible individual with Employee A’s HSA and $1,500 to Employee
1 for the definition of comparable family HDHP coverage. The nonhighly B’s HSA. Employer F’s HSA contributions
participating employee. compensated employees did not receive satisfy the comparability rules.
(b) Examples. The following examples comparable contributions, and, therefore,
Employer E’s HSA contributions for calendar Q–4: What is the effective date for the
illustrate the rules in Q & A–1 and Q & year 2010 do not satisfy the comparability rules in this section?
A–2 of this section. No contributions are rules. A–4: The rules in this section are
made through a section 125 cafeteria effective for employer contributions
plan and none of the employees in the Q–3: May an employer make larger made for calendar years beginning on or
following examples are covered by a HSA contributions for employees with after January 1, 2010.
collective bargaining agreement. All of self plus two HDHP coverage than
■ Par. 10. Section 54.4980G–7 is added
the employees in the following employees with self plus one HDHP
coverage even if the employees with self to read as follows:
examples have the same HDHP
deductible for the same category of plus two are all highly compensated § 54.4980G–7 Special comparability rules
coverage. employees and the employees with self for qualified HSA distributions contributed
plus one are all nonhighly compensated to HSAs on or after December 20, 2006 and
Example 1. In 2010, Employer A employees? before January 1, 2012.
contributes $1,000 for the calendar year to A–3: (a) Yes. Q & A–1 in § 54.4980G–
the HSA of each full-time nonhighly
Q–1: How do the comparability rules
compensated employee who is an eligible
4 provides that an employer’s of section 4980G apply to qualified HSA
individual with self-only HDHP coverage. contribution with respect to the self distributions under section 106(e)(2)?
Employer A makes no contribution to the plus two category of HDHP coverage A–1: The comparability rules of
HSA of any full-time highly compensated may not be less than the contribution section 4980G do not apply to amounts
employee who is an eligible individual with with respect to the self plus one contributed to employee HSAs through
self-only HDHP coverage. Employer A’s HSA category and the contribution with qualified HSA distributions. However,
contributions for calendar year 2010 satisfy respect to the self plus three or more in order to satisfy the comparability
the comparability rules. category may not be less than the rules, if an employer offers qualified
Example 2. In 2010, Employer B
contributes $2,000 for the calendar year to
contribution with respect to the self HSA distributions, as defined in section
the HSA of each full-time nonhighly plus two category. Therefore, the 106(e)(2), to any employee who is an
compensated employee who is an eligible comparability rules are not violated if eligible individual covered under any
individual with self-only HDHP coverage. an employer makes a larger HSA HDHP, the employer must offer
Employer B also contributes $1,000 for the contribution for the self plus two qualified HSA distributions to all
calendar year to the HSA of each full-time category of HDHP coverage than to self employees who are eligible individuals
highly compensated employee who is an plus one coverage, even if the covered under any HDHP. However, if
eligible individual with self-only HDHP employees with self plus two coverage an employer offers qualified HSA
coverage. Employer B’s HSA contributions are all highly compensated employees distributions only to employees who are
for calendar year 2010 satisfy the
comparability rules.
and the employees with self plus one eligible individuals covered under the
Example 3. In 2010, Employer C coverage are all nonhighly compensated employer’s HDHP, the employer is not
contributes $1,000 for the calendar year to employees. Likewise, the comparability required to offer qualified HSA
the HSA of each full-time nonhighly rules are not violated if an employer distributions to employees who are
compensated employee who is an eligible makes a larger HSA contribution for the eligible individuals but are not covered
individual with self-only HDHP coverage. self plus three category of HDHP under the employer’s HDHP.
Employer C contributes $2,000 for the coverage than to self plus two coverage, Q–2: What is the effective date for the
calendar year to the HSA of each full-time even if the employees with self plus rules in this section?
highly compensated employee who is an three coverage are all highly A–2: The rules in this section are
eligible individual with self-only HDHP effective for are effective for employer
coverage. Employer C’s HSA contributions
compensated employees and the
for calendar year 2010 do not satisfy the employees with self plus two coverage contributions made for calendar years
comparability rules. are all nonhighly compensated beginning on or after January 1, 2010.
Example 4. In 2010, Employer D employees. ■ Par. 11. Section 54.6011–2 is added to
contributes $1,000 for the calendar year to (b) Example. The following example read as follows:
the HSA of each full-time nonhighly illustrates the rules in paragraph (a) of
compensated employee who is an eligible this Q & A–3. In the following example, § 54.6011–2 General requirement of return,
individual with self-only HDHP coverage. no contributions are made through a statement, or list.
Employer D also contributes $1,000 to the section 125 cafeteria plan and none of Effective for any Form 8928 that is
CPrice-Sewell on DSKGBLS3C1PROD with RULES
HSA of each full-time highly compensated the employees are covered by a due on or after January 1, 2010, any
employee who is an eligible individual with person liable for tax under section
self-only HDHP coverage. In addition, the
collective bargaining agreement.
4980B, 4980D, 4980E, or 4980G of the
employer contributes an additional $500 to Example. In 2010, Employer F contributes
the HSA of each nonhighly compensated $1,000 for the calendar year to the HSA of
Code shall file a return with respect to
employee who participates in a wellness each full-time employee who is an eligible the tax on Form 8928. The return must
program. The nonhighly compensated individual with self plus one HDHP include the information required by
employees did not receive comparable coverage. Employer F contributes $1,500 for Form 8928 and the instructions issued
contributions, and, therefore, Employer D’s the calendar year to the HSA of each with respect to it.
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