Lake Geneva, WI (PRWEB) October 30, 2006
On Friday, October 27, the U.S. Department of Labor issued additional guidance concerning Health Savings Accounts (HSAs). The new guidance addresses specific actions by employers, such as paying for employees' HSA account fees, when establishing and contributing to HSA accounts for their employees.
The guidance builds on the Department's guidance issued in April, 2004 that HSAs generally do not constitute "employee benefit plans" under ERISA when there is limited involvement by the employer. The latest guidance clarifies that employers can:
- Pay HSA account fees for their employees.
- Open an HSA for an employee and deposit employer funds in the account even without the employee's consent.
- Limit the HSA providers that it allows to market their HSA products in the workplace or select a single HSA provider to which it will forward contributions.
- Select an HSA provider that offers some or all of the investment options made available to the employees in their 401(k) plan.
The guidance also clarifies that employers may appropriately realize savings from reductions in employment taxes when employees make HSA contributions on a pre-tax basis through a cafeteria plan.
"This guidance removes some of the lingering concerns employers have had that HSAs would trigger responsibilities and liabilities under ERISA," says Roy Ramthun, President of HSA Consulting Services.
"Some companies have held back offering HSAs to their employees because of these concerns. With these additional clarifications, companies can safely administer their HSA program with greater ease. This should greatly enhance employer adoption of HSAs which will enhance prospects for their growth," says Ramthun.
To review or download the U.S. Department of Labor latest HSA Guidance visit http://www.HSAEd.com "America's #1 Educational Resource for Health Savings Accounts".