HSA Council: ‘Regulatory Uncertainty’ from Excise Tax Hits HSA Plans

Regulatory uncertainty about how the Affordable Care Act’s excise tax on so-called Cadillac health plans will affect health savings accounts is causing employers to eliminate payroll deduction contributions to HSAs, according to a study released today by ABA’s HSA Council.

“Though our study shows that many HSA-qualified plans are expected to remain under the initial Cadillac tax threshold, employers in expensive states or with expensive plans may incur tax liability right away, in 2018,” said ABA SVP Kevin McKechnie. “The tax is calculated monthly, so employers who contribute large amounts in one month to help employees seed accounts may need to spread contributions over the course of a plan year in order to avoid the tax.”

ABA has said that HSAs are an effective vehicle for increasing health and wellness while cutting costs. To help preserve this vehicle, the HSA Council is urging the IRS to exclude employee HSA contributions from the Cadillac tax. For more information, contact McKechnie.