The IRS has published final regulations on the HSA comparability rules and how to report and pay excise taxes for failure to comply with comparability requirements or various group health plan mandates (including COBRA and HIPAA). You will find few differences between these final regulations and the proposed regulations issued in 2008. (These comparability provisions apply to employer contributions made for calendar years beginning on or after Jan. 1, 2010.)

The following are comments on excise tax reporting and the HSA comparability requirements.

Excise Tax Reporting. Persons can be liable for an excise tax for failure to meet the Code's requirements regarding

• COBRA
• HIPAA portability (including GINA mandates)
• Mental health parity, and
• Minimum hospital stays for newborns and mothers or Michelle's Law.

Individuals liable for an excise tax generally must file IRS Form 8928 and pay the tax by the due date for filing their federal income tax returns (without extensions). Take note of this provision eliminating extensions for filing the Form 8928 because it may be a surprise for companies routinely filing extensions.

A Form 8928 must be filed by employers liable for an excise tax for noncomparable HSA or Archer MSA contributions by the April 15th following the calendar year in which the noncomparable contributions were made. (Form 8928 has not been released yet, but a version has been released requesting comments.)

The excise tax reporting provisions apply to any Form 8928 due on or after Jan. 1, 2010.

HSA Comparability Requirements.

The final regulations reflect changes to the HSA comparability rules made by the Tax Relief and Health Care Act of 2008 (TRHCA). Some of the changes result in the following:

• The regulations clarify that comparable contributions are required for all non-HCEs who are within the same group and for all HCEs who are within the same group even if an employer may make larger annual HSA contributions for non-HCEs than for HCEs who are within the same group of comparable participating employees. (This is permitted under TRHCA).
• An employer may make a full year's worth of HSA contributions under TRHCA's full-contribution rule for mid-year eligible individuals, so long as contributions are made on an equal and uniform basis for all comparable mid-year eligible individuals.
• An employer can make a larger HSA contribution for employees in a higher tier of family HDHP coverage than to those in a lower tier even if the employees in the higher tier are all HCEs and the employees in the lower tier are all non-HCEs. (For instance, self-plus-two is a higher tier than self-plus-one.)
• An employer can offer qualified HSA distributions (i.e., direct rollovers to HSAs from health FSAs or HRAs) to any eligible employee covered under any HDHP if the employer offers qualified HSA distributions to all such employees. Alternatively, an employer may limit qualified HSA distributions to eligible employees covered under the employer's HDHP.

Click here to view copy of pertinent regulations. (Treas. Reg. Secs. 54.4980B-2, 54.4980D-1, 54.4980E-1, 54.4980G-1, 54.4980G-3, 54.4980G-4, 54.4980G-6, 54.4980G-7, 54.6011-2, 54.6061-1, 54.6071-1, 54.6091-1, and 54.6151-1, 74 Fed. Reg. 45994 (Sept. 8, 2009)