Anyone have thoughts on this?
Are you familiar with HSA discrimination rules? I could use your help with a unique client situation. Below are the relevant facts.
· S-Corp owned 90% by primary corporate employee and 10% by part-time employee. The 90% owner is highly compensated. The 10% owner is not – he earns about $10,000/year for part-time work.
· They executed a group, high-deductible plan (HSA eligible) for 2019. The 90% owner wants the company to fund a pro-rata contribution to their respective HSA accounts up to the max this year. So, he would receive $3,150 (90% X individual limit of $3,500) and the 10% owner would receive $350 (10% X $3,500). Again, this would be a corporate contribution.
I’m no HSA expert, but this sounds like discrimination in favor of the highly compensated 90% owner.
Thoughts?
Are you familiar with HSA discrimination rules? I could use your help with a unique client situation. Below are the relevant facts.
· S-Corp owned 90% by primary corporate employee and 10% by part-time employee. The 90% owner is highly compensated. The 10% owner is not – he earns about $10,000/year for part-time work.
· They executed a group, high-deductible plan (HSA eligible) for 2019. The 90% owner wants the company to fund a pro-rata contribution to their respective HSA accounts up to the max this year. So, he would receive $3,150 (90% X individual limit of $3,500) and the 10% owner would receive $350 (10% X $3,500). Again, this would be a corporate contribution.
I’m no HSA expert, but this sounds like discrimination in favor of the highly compensated 90% owner.
Thoughts?