[Federal Register Volume 71, Number 177 (Wednesday, September 13, 2006)]
[Rules and Regulations]
[Pages 53966-53967]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-15125]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[TD 9277]
RIN 1545-BE30


Employer Comparable Contributions to Health Savings Accounts 
Under Section 4980G; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document contains a correction to final regulations (TD 
9277) that were published in the Federal

[[Page 53967]]

Register on Monday, July 31, 2006 (71 FR 43056) providing guidance 
regarding employer comparable contributions to Health Savings Accounts 
(HSAs) under section 4980G.

DATES: These corrections are effective July 31, 2006.

FOR FURTHER INFORMATION CONTACT: Mireille T. Khoury, (202) 622-6080 
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The correction notice that is the subject of this document is under 
section 4980G of the Internal Revenue Code.

Need for Correction

    As published, the final regulations (TD 9277) contain errors that 
may prove to be misleading and are in need of clarification.

List of Subjects in 26 CFR Part 54

    Excise taxes, Pensions, Reporting and recordkeeping requirements.

Correction of Publication

0
Accordingly, 26 CFR part 54 is corrected by making the following 
correcting amendments:

PART 54--PENSION EXCISE TAXES

0
Paragraph 1. The authority citation for part 54 continues to read, in 
part, as follows:

    Authority: 26 U.S.C. 7805 * * *


0
Par. 2. Section 54.4980G-0 is corrected by:
0
1. Revising the entries for 54.4980G-4 Q-5 and Q-11.
0
2. Revising the entries for 54.4980G-5 Q-3.


Sec.  54.4980G-0  Table of contents.

* * * * *


Sec.  54.4980G-4  Calculating comparable contributions.

* * * * *
    Q-5: Must an employer use the same contribution method as described 
in Q & A-2 and Q & A-4 of this section for all employees for any month 
during the calendar year?
* * * * *
    Q-11: If an employer makes additional contributions to the HSAs of 
all comparable participating employees who are eligible to make the 
additional contributions (HSA catch-up contributions) under section 
223(b)(3), do the contributions satisfy the comparability rules?
* * * * *


Sec.  54.4980G-5  HSA comparability rules and cafeteria plans and 
waiver of excise tax.

* * * * *
    Q-3: If under the employer's cafeteria plan, employees who are 
eligible individuals and who participate in health assessments, disease 
management programs or wellness programs receive an employer 
contribution to an HSA and the employees have the right to elect to 
make pre-tax salary reduction contributions to their HSAs, are the 
contributions subject to the comparability rules?
* * * * *

0
Par. 3. Section 54.4980G-4 is corrected by:
0
1. Revising A-2 paragraph (c) Example 2.
0
2. Revising A-2 paragraph (e) Example 1.


Sec.  54.4980G-4  Calculating comparable contributions.

* * * * *
    A-2: * * *
    (c) * * *

    Example 2. In a calendar year, Employer J offers its employees 
an HDHP and contributes on a monthly pay-as-you-go basis to the HSAs 
of employees who are eligible individuals with coverage under 
Employer J's HDHP. In the calendar year, Employer J contributes $50 
per month to the HSA of each employee with self-only HDHP coverage 
and $100 per month to the HSA of each employee with family HDHP 
coverage. From January 1st through March 31st of the calendar year, 
Employee X is an eligible individual with self-only HDHP coverage. 
From April 1st through December 31st of the calendar year, X is an 
eligible individual with family HDHP coverage. For the months of 
January, February and March of the calendar year, Employer J 
contributes $50 per month to X's HSA. For the remaining months of 
the calendar year, Employer J contributes $100 per month to X's HSA. 
Employer J's contributions to X's HSA satisfy the comparibility 
rules.

    (d) * * *
    (e) * * *

    Example 1. In a calendar year, Employer K offers its employees 
an HDHP and contributes on a look-back basis to the HSAs of 
employees who are eligible individuals with coverage under Employer 
K's HDHP. Employer K contributes $600 ($50 per month) for the 
calendar year to the HSA of each employee with self-only HDHP 
coverage and $1,200 ($100 per month) for the calendar year to the 
HSA of each employee with family HDHP coverage. From January 1st 
through June 30th of the calendar year, Employee Y is an eligible 
individual with family HDHP coverage. From July 1st through December 
31st, Y is an eligible individual with self-only HDHP coverage. 
Employer K contributes $900 on a look-back basis for the calendar 
year to Y's HSA ($100) per month for the months of January through 
June and $50 per month for the months of July through December. 
Employer K's contributions to Y's HSA satisfy the comparability 
rules.
* * * * *

Guy R. Traynor,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel (Procedure and Administration).
[FR Doc. E6-15125 Filed 9-12-06; 8:45 am]
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