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When an employer contributes to an employees hsa account

Not sure what the laws are about this. My husbands employer which is a small business owned by four people. Started a hsa account for him when he was hired about 3yrs ago. They have it set up to be deposited in a bank account. The issues is because they pay him once a month. when he gets his check at the end of the month he can see the contribution they made but they have been waiting at least two months before they deposit the money. But now for almost the last three months his paychecks are still showing that they are still contributing but there is nothing in the hsa account at the bank. When he ask them why there wasn't anything in the account. They said "that since they have had a few employees quit recently that they was going to wait a while before just giving them free money basically". They never said how long awhile was, and the fact my husband has already been there 3yrs and they were contributing and now they apparently aren't. they are treating him like a new employee. I understand its voluntary but can they just stop like that? And what about his paychecks that show contributions but they haven't made any of those deposit they are claiming they have. I know once the employer gives the money to the employee they can't get it back. But can they decide not deposit it after it shows on an employees pay stub?


  • rrupert
    rrupert ✭✭✭
    edited September 2017

    Is he personally putting part of his wages into the HSA as a contribution or is it fully employer funded? Generally the employer can choose to deposit their part of any money at the beginning of the plan year, quarterly, monthly, each paycheck or pretty much on whatever schedule the employer wants, however that should be communicated in advance to the employee. And it should stop being communicated on the check that he is getting a benefit that he truly is NOT getting. Many employers do pay it out over the plan year rather than prefund it. However I am unsure what happens if they stop funding it when they stated they would. Does he have the promise to fund in writing and are there any caveats? I suspect the employer is not well versed and wish I could help you more. But I can't find anything that requires continuing deposits for an HSA unless it somehow falls under an ERISA-covered health insurance plan.

    You might read through here: Part of the issue will depend on the answer to my first question -- if employee deductions are allowed then Section 125 rules must be followed at least on the employee portion.

    You might call your state department of Insurance and ask about employer-funded HSAs . The Department of Treasury is the regulatory body :
    Who to call for help with HSA questions:
    1-800-829-1040 for individuals
    1-800-829-4933 for businesses

  • Thank you. And to answer your question it is fully funded by the employer. He doesn't put anything in that account only them. And to my knowledge he didn't receive any information about this account. I am not sure if the employer gets a tax break or something if they contribute. But just the fact that they are showing it on his stub but aren't actually depositing seems like some type of law is being broken. But thanks again for the response and information.