My employer contributes 1250 to HSA for 2009. The amount is contributed on 1/1/2009.
Say I terminate employment on 1/15/2009.
Will I have excess contributions subject to excise tax?
Will my employer get some of that money back?
Full Version: Employer contribution to HSA
Employer cannot contribute directly into a HSA, only EE money can go directly. Once money is in the HSA, only the employee can use it. Are you sure that the product is an HSA and not a HRA?
QUOTE (leevena @ Oct 31 2008, 03:29 PM) 
Employer cannot contribute directly into a HSA, only EE money can go directly. Once money is in the HSA, only the employee can use it. Are you sure that the product is an HSA and not a HRA?
Yes our open enrollment material references an HSA not HRA
QUOTE (leevena @ Oct 31 2008, 02:29 PM)
Employer cannot contribute directly into a HSA, only EE money can go directly. Once money is in the HSA, only the employee can use it. Are you sure that the product is an HSA and not a HRA?
Employer contributions to an HSA are allowed. See : http://www.treasury.gov/offices/public-aff...-english-07.pdf
QUOTE (MARYMM @ Nov 4 2008, 01:24 PM)
QUOTE (leevena @ Oct 31 2008, 02:29 PM)
Employer cannot contribute directly into a HSA, only EE money can go directly. Once money is in the HSA, only the employee can use it. Are you sure that the product is an HSA and not a HRA?
Employer contributions to an HSA are allowed. See : http://www.treasury.gov/offices/public-aff...-english-07.pdf
I guess I'm confused- page 1 of attached pdf from treasury indicates employer money can go into the HSA as well
QUOTE (alexa @ Nov 4 2008, 01:21 PM)
QUOTE (MARYMM @ Nov 4 2008, 01:24 PM)
QUOTE (leevena @ Oct 31 2008, 02:29 PM)
Employer cannot contribute directly into a HSA, only EE money can go directly. Once money is in the HSA, only the employee can use it. Are you sure that the product is an HSA and not a HRA?
Employer contributions to an HSA are allowed. See : http://www.treasury.gov/offices/public-aff...-english-07.pdf
I guess I'm confused- page 1 of attached pdf from treasury indicates employer money can go into the HSA as well
Yes, employer contributions are definitely allowed. There is another document on that site,"All About HSA's", that also discussses employer contributions
QUOTE (MARYMM @ Nov 4 2008, 04:10 PM)
QUOTE (alexa @ Nov 4 2008, 01:21 PM)
QUOTE (MARYMM @ Nov 4 2008, 01:24 PM)
QUOTE (leevena @ Oct 31 2008, 02:29 PM)
Employer cannot contribute directly into a HSA, only EE money can go directly. Once money is in the HSA, only the employee can use it. Are you sure that the product is an HSA and not a HRA?
Employer contributions to an HSA are allowed. See : http://www.treasury.gov/offices/public-aff...-english-07.pdf
I guess I'm confused- page 1 of attached pdf from treasury indicates employer money can go into the HSA as well
Yes, employer contributions are definitely allowed. There is another document on that site,"All About HSA's", that also discussses employer contributions
Sorry for the confusion, this is my fault. Yes, the employer can contribute. I had a brain freeze when responding earlier.
QUOTE (leevena @ Nov 4 2008, 06:06 PM)
QUOTE (MARYMM @ Nov 4 2008, 04:10 PM)
QUOTE (alexa @ Nov 4 2008, 01:21 PM)
QUOTE (MARYMM @ Nov 4 2008, 01:24 PM)
QUOTE (leevena @ Oct 31 2008, 02:29 PM)
Employer cannot contribute directly into a HSA, only EE money can go directly. Once money is in the HSA, only the employee can use it. Are you sure that the product is an HSA and not a HRA?
Employer contributions to an HSA are allowed. See : http://www.treasury.gov/offices/public-aff...-english-07.pdf
I guess I'm confused- page 1 of attached pdf from treasury indicates employer money can go into the HSA as well
Yes, employer contributions are definitely allowed. There is another document on that site,"All About HSA's", that also discussses employer contributions
Sorry for the confusion, this is my fault. Yes, the employer can contribute. I had a brain freeze when responding earlier.
If only employer contributions of 1250 goes into my HSA account on 1/2/2009 and I terminate employment on 1/15/2009, will the 1250 need to be returned to my employer?
QUOTE (alexa @ Nov 5 2008, 01:25 AM)
QUOTE (leevena @ Nov 4 2008, 06:06 PM)
QUOTE (MARYMM @ Nov 4 2008, 04:10 PM)
QUOTE (alexa @ Nov 4 2008, 01:21 PM)
QUOTE (MARYMM @ Nov 4 2008, 01:24 PM)
QUOTE (leevena @ Oct 31 2008, 02:29 PM)
Employer cannot contribute directly into a HSA, only EE money can go directly. Once money is in the HSA, only the employee can use it. Are you sure that the product is an HSA and not a HRA?
Employer contributions to an HSA are allowed. See : http://www.treasury.gov/offices/public-aff...-english-07.pdf
I guess I'm confused- page 1 of attached pdf from treasury indicates employer money can go into the HSA as well
Yes, employer contributions are definitely allowed. There is another document on that site,"All About HSA's", that also discussses employer contributions
Sorry for the confusion, this is my fault. Yes, the employer can contribute. I had a brain freeze when responding earlier.
If only employer contributions of 1250 goes into my HSA account on 1/2/2009 and I terminate employment on 1/15/2009, will the 1250 need to be returned to my employer?
As I understand it, once the funds are deposited to your HSA, the employer cannot remove them. The employer can ask the former employee to have the funds returned to them. Our HSA vendor has an Excess Contribution option on their Distribution Form that the employee can select to make that request.
It is my understanding that if the funds are not returned and the former employee is not in an HDHP plan after 1/31, a portion of the $1250 is taxable to the employee.
QUOTE (MARYMM @ Nov 7 2008, 04:22 PM)
QUOTE (alexa @ Nov 5 2008, 01:25 AM)
QUOTE (leevena @ Nov 4 2008, 06:06 PM)
QUOTE (MARYMM @ Nov 4 2008, 04:10 PM)
QUOTE (alexa @ Nov 4 2008, 01:21 PM)
QUOTE (MARYMM @ Nov 4 2008, 01:24 PM)
QUOTE (leevena @ Oct 31 2008, 02:29 PM)
Employer cannot contribute directly into a HSA, only EE money can go directly. Once money is in the HSA, only the employee can use it. Are you sure that the product is an HSA and not a HRA?
Employer contributions to an HSA are allowed. See : http://www.treasury.gov/offices/public-aff...-english-07.pdf
I guess I'm confused- page 1 of attached pdf from treasury indicates employer money can go into the HSA as well
Yes, employer contributions are definitely allowed. There is another document on that site,"All About HSA's", that also discussses employer contributions
Sorry for the confusion, this is my fault. Yes, the employer can contribute. I had a brain freeze when responding earlier.
If only employer contributions of 1250 goes into my HSA account on 1/2/2009 and I terminate employment on 1/15/2009, will the 1250 need to be returned to my employer?
As I understand it, once the funds are deposited to your HSA, the employer cannot remove them. The employer can ask the former employee to have the funds returned to them. Our HSA vendor has an Excess Contribution option on their Distribution Form that the employee can select to make that request.
It is my understanding that if the funds are not returned and the former employee is not in an HDHP plan after 1/31, a portion of the $1250 is taxable to the employee.
Is there any kind of excess tax if not withdrawn from the HSA by 4/15?
No.
But to take advantage of the tax free contributions, you must be enrolled in a HDHP at the time the services being rendered.
If on 4/15 you are no longer enrolled in a HDHP, then you can use the funds without paying taxes on any procedure listed under IRC 213.
If you spend the money on things not listed under IRC 213, you must pay taxes AND a 10% penalty.
But to take advantage of the tax free contributions, you must be enrolled in a HDHP at the time the services being rendered.
If on 4/15 you are no longer enrolled in a HDHP, then you can use the funds without paying taxes on any procedure listed under IRC 213.
If you spend the money on things not listed under IRC 213, you must pay taxes AND a 10% penalty.
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