USA HSA contributions by employer

[Jameson]

I cannot find a definitive answer on this, but can an employer make HSA contributions without offering a health care plan? I have a client that wants to do a certain amount of contributions, but they only have 2 employees so it is not remotely beneficial to get health insurance for them for them. They would like to do an HSA contribution for them though. Is this possible.

Thanks.

 

[DTA93433]

Section 4980H of the Affordable Care Act applies to Applicable Large Employers (ALEs). ALEs are employers with at least 50 full‐time employees (including full‐time equivalent employees). Section 4980H does NOT apply to employers with fewer than 50 full‐time employees, so I don't your client is not mandated to offer health insurance to it's 2 employees. (see - https://obamacare.net/obamacare-employer-mandate)

An HSA may receive contributions from an eligible individual or any other person, including an employer or a
family member, on behalf of an eligible individual. Contributions (other than employer contributions) are deductible
on the taxpayer's return whether or not they itemize. Employer contributions are not included as W2 income. (Pub 969 - HSA & Other Tax-Favored Health Plans, p.2)

 

[DTA93433]

Botched that reply up....I meant to say that because your client has fewer than than the required minimum (50), they are not required to provide health insurance for their employees. And an employer can contribute to their employee's HSA's. (2:30AM....time for bed).