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How to beat the “discrimination tax” on HSA contributions

January 15, 2015

Health savings accounts (HSAs) are wonderful for several reasons…

They let you contribute to the healthcare costs of your employees without facing Affordable Care Act (Obamacare) problems… there are no minimums to pay… and there’s no insurance to deal with.

All you do is make contributions and get a deduction, and your employees get the income as a tax-free fringe benefit. They’ll love it!

But be careful! If you favor one group of employees over another, the IRS will make you pay a 35% tax on your total HSA contributions. Ouch!

Want to learn how to comply with the “discrimination” rules (which are called “comparability” rules in the HSA world)? Want to avoid the dreaded 35% tax penalty? Easy. Just read my new article titled Three Rules for Contributing to Your Employees’ Health Savings Accounts and Beating the Dreaded 35 Percent Discrimination Tax.

Three ways our fact-filled article can help you:

  1. We’ll tell you the three rules that every employer must know. The general rule is that employers must make “comparable” contributions to all employees who have a high-deductible health plan (HDHP). Employees are not eligible for HSA contributions unless they have an HDHP. You’ll get all the facts when you read the full article.
  2. You’ll learn how to make contributions the right way. For starters, be sure to make comparable contributions to employees who are in the same “category.” How does the IRS define a “category?” We’ll tell you the answer, and a lot more, when you read the full article.
  3. We’ll explain how to handle the coverage of dependents. Yes. Your employees’ dependents can be covered by healthcare insurance. And HSA rules allow you to provide coverage for employees with no dependents or many. We’ll give you all the details when you read the full article.

Filed Under: Clothing, Corporations, Employees, Featured Articles, Fringe Benefits, Health Insurance, Health Savings Account (HSA), Health Savings Account (HSA), High Deductible Health Plan (HDHP), Medical (for 105 plans see Section 105 medical plan), Obamacare, Owner Benefits, Penalties, Tax Planning

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