IRS Releases Proposed Regulations under Code Sections 4980B, 4980D, 4980E and 4980G

The Internal Revenue Service (IRS) released proposed regulations under Internal Revenue Code (“Code”) Sections 4980B, 4980D, 4980E and 4980G on July 16, 2008. The proposed regulations include:

• The form and due dates for reporting and paying excise taxes under Code Section 4980B (failure to comply with the Consolidated Omnibus Budget Reconciliation Act (COBRA) requirements), Code Section 4980D (failure to comply with the Health Insurance Portability and Accountability Act (HIPAA) requirements), Code Section 4980E (failure to make comparable Archer Medical Savings Account (MSA) contributions) and Code Section 4980G (failure to make comparable HSA contributions).
• Calculating comparable HSA contributions.
• Special rules for making employer contributions to HSAs for non-highly compensated employees (NHCEs).
• Comparability Rules and Qualified HSA Distributions.

Rules for Reporting and Paying Excise Taxes
Code Section 4980B – Failure to Comply With the Consolidated Omnibus Budget Reconciliation Act (COBRA) Requirements
Excise Tax: Employers that violate COBRA may be subject to both civil sanctions and tax penalties. Under COBRA’s civil sanction procedures, either the Department of Labor or plan beneficiaries themselves can sue a plan that fails to provide…. Download the whole document here – hsa-proposed-regulations.pdf