DEPOSITS

Deposits to an HSA may be made by any policyholder of a qualified High Deductible Health Plan (HDHP), by an employer on behalf of a policyholder, or any other person. If an employer makes deposits to an HDHP on behalf of its employees, non-discrimination rules apply — that is, all employees must be treated equally. However, if contributions are made through a section 125 plan, non-discrimination rules do not apply. Employers may treat full-time and part-time employees differently, and employers may treat individual and family participants differently. (The treatment of employees who are not enrolled in a HDHP is not considered for non-discrimination purposes.) Also, for 2007, employers may contribute more for non-highly compensated employees than highly compensated employees.
Contributions from an employer or employee may be made on a pre-tax basis through an employer. If this option is not available through the employer, contributions may be made on a post-tax basis and then used to decrease gross taxable income on the following year's Form 1040. The main advantage of making pre-tax contributions is the FICA and FUTA deduction, which amounts to a savings of 7.65% to the employer and employee. Regardless of the method or tax savings associated with the deposit, the deposits may only be made for persons covered under a HDHP, with no other coverage beyond certain qualified additional coverage.