Reporting Requirements for Employers with a High Deductible Health Plan

We want to remind you about unique requirements for employers that sponsor High Deductible Health Plans (HDHP) with employees contributing to a Health Savings Account (HSA).

If your company sponsored a HDHP in 2019 and employees established HSAs, contributions made to the HSA by your company and by employees through salary reduction must be reported on Form W-2.

As the employer, you are responsible for determining if:

  1. The employee was covered by a HDHP sponsored by the employer.
  2. The employee was not covered by any impermissible non-HDHP employer plan (think full flexible spending account).
  3. The employee was 55 or older and eligible for catch-up contributions, you may rely on the employees’ self-reporting for date of birth.

Employee contributions made pre-tax through a cafeteria plan are considered employer contributions. These pre-tax cafeteria plan contributions should be combined with any contributions made by your company. This total is reported on Form W-2, Box 12 using code W.

Contributions to a HSA by any Sub-chapter S 2% (or more) shareholders, members of an LLC or LLP are not allowed through a cafeteria plan. These groups, and any others who made their HSA contributions outside of the payroll system, deduct their contributions on their personal Form 1040. 2019 instructions for Form W-2 state that employer HSA contributions that are not excludable from the employee’s income must be reported in Boxes 1, 3 and 5. Please consult with your payroll and tax advisor for these special circumstances.

HSA Reporting Guidance for Employees

Employees who contribute to or receive distributions from a HSA in 2019 must report both on their personal tax returns using IRS Form 8889. We prepared general guidance that your employees might find helpful. As with all tax issues, employees should contact a tax advisor with their specific issues or questions.

Additional Resources

Feel free to view and/or print the following:

Should you still have questions, please contact your Account Executive, Client Advocate, or consult with your tax advisor.