45994 Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Rules and Regulations 

governmental plans which are rendered 

superfluous with this change. 

Effective/Applicability Date 

These regulations are effective on 

September 8, 2009 and apply to all plan 

years to which section 401(a)(9) applies. 

Special Analyses 

It has been determined that these final 

regulations are not a significant 

regulatory action as defined in 

Executive Order 12866. Therefore, a 

regulatory assessment is not required. It 

also has been determined that section 

553(b) of the Administrative Procedure 

Act (5 U.S.C. chapter 5) does not apply 

to these regulations, and, because 

§§ 1.401(a)(9)–1 and 1.403(b)–6 do not 

impose a collection of information on 

small entities, the Regulatory Flexibility 

Act (5 U.S.C. chapter 6) does not apply. 

Pursuant to section 7805(f) of the Code, 

the notice of proposed rulemaking 

preceding these regulations was 

submitted to the Chief Counsel for 

Advocacy of the Small Business 

Administration for comment on its 

impact on small business. 

Drafting Information 

The principal authors of these 

regulations are Michael P. Brewer and 

Cathy V. Pastor, Office of Division 

Counsel/Associate Chief Counsel (Tax 

Exempt and Government Entities). 

However, other personnel from the IRS 

and the Treasury Department 

participated in the development of these 

regulations. 

List of Subjects in 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

Adoption of Amendments to the 

Regulations 

■ Accordingly, 26 CFR part 1 is 

amended as follows: 

PART 1—INCOME TAXES 

■ Paragraph 1. The authority citation 

for part 1 continues to read in part as 

follows: 

Authority: 26 U.S.C. 7805 * * * 

■ Par. 2. Section 1.401(a)(9)–1 is 

amended by adding a new paragraph (d) 

to A–2 as follows: 

§ 1.401(a)(9)–1 Minimum distribution 

requirement in general. 

* * * * * 

A–2. * * * 

(d) Special rule for governmental 

plans. Notwithstanding anything to the 

contrary in this A–2, a governmental 

plan (within the meaning of section 

414(d)), or an eligible governmental 

plan described in § 1.457–2(f), is treated 

as having complied with section 

401(a)(9) for all years to which section 

401(a)(9) applies to the plan if the plan 

complies with a reasonable and good 

faith interpretation of section 401(a)(9). 

§ 1.401(a)(9)–6 [Amended] 

■ Par. 3. Section 1.401(a)(9)–6 is 

amended by: 

■ 1. Removing Q&A–16. 

■ 2. Redesignating Q&A–17 as Q&A–16. 

■ 3. Removing the word ‘‘A–16’’ and 

adding ‘‘A–15’’ in the newly-designated 

A–16. 

■ 4. Removing the last sentence of the 

newly-designated A–16. 

■ Par. 4. Section 1.403(b)–6 is amended 

by: 

■ 1. Revising the last sentence of 

paragraph (e)(2). 

■ 2. Adding a new paragraph (e)(8). 

The revisions and addition are as 

follows: 

§ 1.403(b)–6 Timing of distributions and 

benefits. 

* * * * * 

(e) Minimum required distributions 

for eligible plans. 

* * * * * 

(2) * * * Consequently, except as 

otherwise provided in this paragraph 

(e), the distribution rules in section 

401(a)(9) are applied to section 403(b) 

contracts in accordance with the 

provisions in § 1.408–8 for purposes of 

determining required minimum 

distributions. 

* * * * * 

(8) Special rule for governmental 

plans. A section 403(b) contract that is 

part of a governmental plan (within the 

meaning of section 414(d)) is treated as 

having complied with section 401(a)(9) 

for all years to which section 401(a)(9) 

applies to the contract, if the contract 

complies with a reasonable and good 

faith interpretation of section 401(a)(9). 

* * * * * 

Linda E. Stiff, 

Deputy Commissioner for Services and 

Enforcement. 

Approved: August 20, 2009. 

Michael Mundaca, 

Acting Assistant Secretary of the Treasury 

(Tax Policy). 

[FR Doc. E9–21453 Filed 9–4–09; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 54 

[TD 9457] 

RIN 1545–BG71 

Employer Comparable Contributions to 

Health Savings Accounts Under 

Section 4980G, and Requirement of 

Return for Filing of the Excise Tax 

Under Section 4980B, 4980D, 4980E or 

4980G 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final regulations. 

SUMMARY: This document contains final 

regulations providing guidance on 

employer comparable contributions to 

Health Savings Accounts (HSAs) under 

section 4980G of the Internal Revenue 

Code (Code) as amended by sections 

302, 305 and 306 of the Tax Relief and 

Health Care Act of 2006 (the Act). The 

final regulations also provide guidance 

relating to the manner and method of 

reporting and paying the excise tax 

under sections 4980B, 4980D, 4980E, 

and 4980G of the Code. These final 

regulations would affect employers that 

contribute to employees’ HSAs and 

Archer MSAs, employers or employee 

organizations that sponsor a group 

health plan, and certain third parties 

such as insurance companies or HMOs 

or third-party administrators who are 

responsible for providing benefits under 

the plan. 

DATES: Effective date. These regulations 

are effective on September 8, 2009. 

Applicability date. The sections of 

these regulations that provide guidance 

on employer comparable contributions 

to HSAs under section 4980G apply to 

employer contributions made on or after 

January 1, 2010. The sections of these 

regulations that provide guidance 

relating to the excise tax under sections 

4980B, 4980D, 4980E and 4980G apply 

to any Form 8928 that is due on or after 

January 1, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Concerning the final regulations as they 

relate to sections 4980E or 4980G, 

Mireille Khoury at (202) 622–6080; and 

concerning the final regulations as they 

relate to section 4980B or 4980D, Russ 

Weinheimer at (202) 622–6080 (not tollfree numbers). 

SUPPLEMENTARY INFORMATION: 

Paperwork Reduction Act 

The collection of information 

contained in these regulations has been 

reviewed and approved by the Office of 


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Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Rules and Regulations 45995 

Management and Budget in accordance 

with the Paperwork Reduction Act of 

1995 (44 U.S.C. 3507(d)), under control 

number 1545–2146. The collection of 

information in these final regulations is 

in § 54.6011–2. The collection of 

information results from the 

requirement to file a return for the 

payment of the excise tax under section 

4980B, 4980D, 4980E, or 4980G of the 

Code. The likely respondents are 

employers that contribute to employees’ 

HSAs and Archer MSAs, employers or 

employee organizations that sponsor a 

group health plan, and certain third 

parties such as insurance companies or 

HMOs or third-party administrators who 

are responsible for providing benefits 

under the plan. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a valid control 

number assigned by the Office of 

Management and Budget. Books or 

records relating to a collection of 

information must be retained as long as 

their contents might become material in 

the administration of any internal 

revenue law. Generally, tax returns and 

tax return information are confidential, 

as required by 26 U.S.C. 6103. 

Background 

This document contains final 

amendments to the Excise Tax 

Regulations (26 CFR part 54) under 

section 4980G of the Code, as amended 

by Sections 302 and 305 of the Tax 

Relief and Health Care Act of 2006 (the 

Act), Public Law 109–432, under 

paragraph (d) of section 4980G of the 

Code, as enacted by section 306 of the 

Act, and under Section 4980E of the 

Code. 

Under section 4980G, an excise tax is 

imposed on an employer that fails to 

make comparable contributions to the 

HSAs of its employees. On July 31, 

2006, final regulations on comparability 

were published in the Federal Register, 

72 FR 30501 (2007–26 IRB 1495), TD 

9277. In addition, on April 17, 2008, 

final regulations were published in the 

Federal Register, 73 FR 20794 (2008–20 

IRB 975), TD 9393, providing guidance 

on employer comparable contributions 

to HSAs in instances where an 

employee has not established an HSA 

by December 31st and in instances 

where an employer accelerates 

contributions for the calendar year for 

employees who have incurred qualified 

medical expenses. See § 601.601(d)(2). 

This document also contains final 

amendments to the Excise Tax 

Regulations (26 CFR part 54) under 

sections 4980B and 4980D. Under 

section 4980B, group health plans 

maintained by an employer with 20 or 

more employees must comply with 

continuation coverage requirements. If a 

plan does not satisfy these 

requirements, an excise tax is imposed 

of $100 per day per affected beneficiary. 

Final regulations under section 4980B 

have been published, including 

provisions concerning the excise tax, 

but no return filing requirement has 

previously been imposed. See 

§ 54.4980B–2, Q&A–9 and Q&A–10. 

Moreover, under chapter 100 of the 

Code, group health plans must comply 

with various requirements, including 

limitations on preexisting condition 

exclusions, certification of creditable 

coverage, special enrollments, 

prohibitions against discrimination 

based on a health factor (including 

genetic information), parity between 

mental health benefits and medical/ 

surgical benefits, minimum hospital 

lengths of stay in connection with 

childbirth, and continued coverage for 

post-secondary students with a serious 

medical condition. If a plan does not 

satisfy any of these requirements under 

chapter 100, section 4980D imposes an 

excise tax of $100 per day per affected 

individual. Regulations interpreting the 

substantive requirements of chapter 100 

have previously been published, but no 

regulations have been published 

concerning the excise tax under section 

4980D. 

On July 16, 2008, proposed 

regulations (REG–120476–07) were 

published in the Federal Register (73 

FR 40793) addressing comparable 

contributions to nonhighly compensated 

employees. The proposed regulations 

also provided guidance for employers 

that offer qualified HSA distributions 

and for employers that make the 

maximum annual HSA contribution on 

behalf of all employees who are eligible 

individuals on the first day of the last 

month of the employees’ taxable year. 

Finally, the proposed regulations 

provided guidance on the requirement 

of a return to accompany payment of the 

excise taxes under sections 4980B, 

4980D, 4980E, and 4980G and the time 

for filing that return. These final 

regulations adopt the provisions of the 

proposed regulations without 

substantive revision. The final 

regulations make certain minor 

clarifying changes to the rules of the 

proposed regulations. 

Explanation of Provisions and 

Summary of Comments 

Special Rule for Contributions to 

Nonhighly Compensated Employees 

Paragraph (d) of section 4980G 

provides an exception to the 

comparability rules that allows, but 

does not require, employers to make 

larger contributions to the HSAs of 

nonhighly compensated employees than 

the employer makes to the HSAs of 

highly compensated employees. The 

final regulations address this exception 

to comparability in § 54.4980G–4 and 

provide that employer contributions to 

the HSAs of nonhighly compensated 

employees may be larger than employer 

contributions to the HSAs of highly 

compensated employees with 

comparable coverage during a period. 

Conversely, employer contributions to 

the HSAs of highly compensated 

employees may not exceed employer 

contributions to the HSAs of nonhighly 

compensated employees with 

comparable coverage during a period. 

The comparability rules still apply 

with respect to contributions to the 

HSAs of all nonhighly compensated 

employees who are comparable 

participating employees (eligible 

individuals who are in the same 

category of employees with the same 

category of high deductible health plan 

(HDHP) coverage) and an employer 

must make comparable contributions to 

the HSA of each nonhighly 

compensated employee who is a 

comparable participating employee 

during the calendar year. Similarly, the 

comparability rules still apply with 

respect to contributions to the HSAs of 

all highly compensated employees who 

are comparable participating employees 

and an employer must make comparable 

contributions to the HSA of each highly 

compensated employee who is a 

comparable participating employee 

during the calendar year. Collectively 

bargained employees are disregarded for 

purposes of section 4980G, as are HSA 

contributions made through a cafeteria 

plan. 

For purposes of section 4980G(d), 

highly compensated employee is 

defined under section 414(q) and 

includes any employee who was (1) a 

five-percent owner at any time during 

the year or the preceding year; or (2) for 

the preceding year, (A) had 

compensation from the employer in 

excess of $110,000 (for 2009, indexed 

for inflation) and (B) if elected by the 

employer, was in the group consisting of 

the top 20 percent of employees when 

ranked based on compensation. 

Nonhighly compensated employees are 

employees that are not highly 

compensated employees. 

Maximum HSA Contribution Permitted 

for Employees Who Become Eligible 

Individuals Mid-Year 

Section 305 of the Act provides that 

individuals who are eligible individuals 


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45996 Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Rules and Regulations 

on the first day of the last month of the 

employees’ taxable year (December 1 for 

calendar year taxpayers) may make or 

have made on their behalf the maximum 

annual HSA contribution based on their 

HDHP coverage (self only or family) on 

that date. A portion of the contribution 

is included in income and subject to an 

additional 10 percent tax if the 

individual fails to remain an eligible 

individual for 12 months after the last 

month of the taxable year. See section 

223(b)(8). Section 54.4980G–6 of the 

final regulations provides that the 

employer can contribute up to this 

maximum contribution on behalf of all 

employees who are eligible individuals 

on the first day of the last month of the 

employees’ taxable year (December 1 for 

calendar year taxpayers), including 

employees who became eligible 

individuals after January 1st of the 

calendar year and eligible individuals 

who were hired after January 1st of the 

calendar year (both such classes of 

individuals are hereinafter referred to as 

‘‘mid-year eligible individuals’’). An 

employer who makes the maximum 

calendar year HSA contribution, or who 

contributes more than a pro-rata 

amount, on behalf of employees who are 

mid-year eligible individuals will not 

fail to satisfy comparability merely 

because some employees will have 

received more contributions on a 

monthly basis than employees who 

worked the entire calendar year. 

Employers are not required to make 

these greater than pro-rata contributions 

and may instead pro-rate contributions 

based on the number of months that an 

individual was both employed by the 

employer and an eligible individual. 

However, if an employer contributes 

more than the monthly pro-rata amount 

for the calendar year to the HSA of any 

employee who is a mid-year eligible 

individual, the employer must then 

contribute, on an equal and uniform 

basis, a greater than pro-rata amount to 

the HSAs of all comparable 

participating employees who are midyear eligible individuals. Likewise, if 

the employer contributes the maximum 

annual contribution amount for the 

calendar year to the HSA of any 

employee who is a mid-year eligible 

individual, the employer must 

contribute that same amount to the 

HSAs of all comparable participating 

employees who are mid-year eligible 

individuals. 

Special Comparability Rules for 

Qualified HSA Distributions 

Section 302(a) of the Act provides for 

qualified HSA distributions. See section 

106(e) and Notice 2007–22 (2007–10 

IRB 670). See § 601.601(d)(2). A 

qualified HSA distribution is a direct 

distribution of an amount from a health 

flexible spending arrangement (health 

FSA) or a health reimbursement 

arrangement (HRA) to an HSA. The 

distribution must not exceed the lesser 

of the balance in the health FSA or HRA 

on September 21, 2006, or as of the date 

of the distribution. Section 54.4980G–7 

of the final regulations provides that if 

an employer offers qualified HSA 

distributions to any employee who is an 

eligible individual covered under any 

HDHP, the employer must offer 

qualified HSA distributions to all 

employees who are eligible individuals 

covered under any HDHP. However, an 

employer that offers qualified HSA 

distributions only to employees who are 

eligible individuals covered under the 

employer’s HDHP is not required to 

offer qualified HSA distributions to 

employees who are eligible individuals 

but are not covered under the 

employer’s HDHP. 

Reporting and Payment of the Excise 

Tax Under Section 4980B, 4980D, 4980E 

or 4980G 

The regulations prescribe the manner 

and method of paying the excise taxes 

imposed under section 4980B, 4980D, 

4980E, or 4980G. The final regulations, 

like the proposed regulations, provide 

that these excise taxes must be reported 

on Form 8928, ‘‘Return of Certain Excise 

Taxes Under Chapter 43 of the Internal 

Revenue Code.’’ The excise tax under 

section 4980B, 4980D, 4980E or 4980G 

must be paid at the time prescribed for 

filing of the excise tax return (without 

extensions). With respect to the excise 

tax under section 4980B or 4980D for 

employers and third parties such as 

insurers or third party administrators, 

the return is due on or before the due 

date for filing the person’s Federal 

income tax return. An extension to file 

the person’s income tax return does not 

extend the date for filing Form 8928. 

With respect to the excise tax under 

section 4980B or 4980D for 

multiemployer or specified multiple 

employer health plans, the return is due 

on or before the last day of the seventh 

month after the end of the plan year. 

Finally, with respect to the excise tax 

under section 4980E or 4980G for 

noncomparable contributions, the return 

is due on or before the 15th day of the 

fourth month following the calendar 

year in which the noncomparable 

contributions were made. The final 

regulations also provide guidance 

regarding the place for filing these 

excise tax returns, the signing of these 

excise returns, and the time and place 

for paying the tax shown on such 

returns. 

Two comments were received 

regarding the reporting and filing of the 

excise taxes under sections 4980B, 

4980D, 4980E, and 4980G. One 

commentator was concerned that the 

noncompliance period under section 

4980B or 4980D could extend beyond 

the due date for filing the excise tax 

return and suggested that the due date 

be extended to 90 days after the end of 

the noncompliance period. It is true that 

the noncompliance period under section 

4980B, for example, could extend over 

four or more taxable years of the person 

responsible for payment of the tax. 

Therefore, extending the due date until 

90 days after the end of the 

noncompliance period would in some 

cases defer the obligation to pay the 

excise tax for over four years, which 

would not be in the interest of sound tax 

administration. As such, the final 

regulations do not adopt this change. 

Another commentator noted that the 

excise tax might be due before the 

person responsible for paying it had 

even discovered that a failure under 

section 4980B or 4980D had occurred. 

However, this concern is mitigated by 

the fact that sections 4980B and 4980D 

provide that the excise tax does not 

apply for any period for which the 

responsible party did not know, or 

exercising reasonable diligence would 

not have known, that the failure existed. 

Also, under sections 4980B and 4980D, 

the excise tax does not apply if the 

failure is corrected (that is, the failure is 

retroactively undone to the extent 

possible and the affected beneficiary is 

placed in a financial position as good as 

the beneficiary would have been had the 

failure not occurred). 

Finally, a commentator also stated 

that there are some uncertainties about 

the application of the excise tax rules to 

various situations that could arise under 

section 4980B. The commentator 

suggested that the filing and payment 

requirement for the excise tax under 

section 4980B should not apply until 

additional guidance was issued that 

addressed these uncertainties. The 

Treasury Department and the IRS 

believe that the statutory and regulatory 

provisions in this area provide 

appropriate guidance. Therefore, the 

final regulations do not adopt this 

comment. 

The guidance in the proposed 

regulations relating to the excise taxes 

imposed under section 4980B, 4980D, 

4980E, or 4980G was contained in Q & 

A–11 in § 4980B–2, Q & A–1 in 

§ 4980D–1, Q & A–1 in § 4980E–1, and 

Q & A–5 in § 4980G–1. The final 

regulations provide additional clarifying 

information relating to the guidance 

previously provided in these Q &As, 


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Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Rules and Regulations 45997 

and the final regulations also 

consolidate this guidance by including 

it under the following sections: 

§§ 54.6011–2, 54.6061–1, 54.6071–1, 

54.6091–1 and 54.6151–1. 

Effective/Applicability Date 

The sections of these regulations that 

provide guidance on employer 

comparable contributions to HSAs 

under section 4980G apply to employer 

contributions made on or after January 

1, 2010. 

The sections of these regulations that 

provide guidance relating to the excise 

tax under sections 4980B, 4980D, 4980E 

and 4980G apply to any Form 8928 that 

is due on or after January 1, 2010. 

Special Analyses 

It has been determined that this 

Treasury Decision is not a significant 

regulatory action as defined in 

Executive Order 12866. Therefore, a 

regulatory assessment is not required. It 

also has been determined that section 

553(b) of the Administrative Procedure 

Act (5 U.S.C. chapter 5) does not apply 

to these regulations. It is hereby 

certified that the collection of 

information in these regulations will not 

have a significant economic impact on 

a substantial number of small entities. 

Therefore, a Regulatory Flexibility 

Analysis under the Regulatory 

Flexibility Act (5 U.S.C. chapter 6) is 

not required. Pursuant to section 7805(f) 

of the Code, the notice of proposed 

rulemaking preceding this regulation 

was submitted to the Chief Counsel for 

Advocacy of the Small Business 

Administration for comment on its 

impact on small business. 

Drafting Information 

The principal authors of these final 

regulations are Mireille Khoury and 

Russ Weinheimer, Office of Division 

Counsel/Associate Chief Counsel (Tax 

Exempt and Government Entities), 

Internal Revenue Service. However, 

personnel from other offices of the IRS 

and Treasury Department participated 

in their development. 

List of Subjects in 26 CFR Part 54 

Excise taxes, Pensions, Reporting and 

recordkeeping requirements. 

Adoption of Amendment to the 

Regulations 

■ Accordingly, 26 CFR part 54 is 

amended as follows: 

PART 54—PENSION EXCISE TAXES 

■ Paragraph 1. The authority citation 

for part 54 is amended by adding entries 

in numerical order to read in part as 

follows: 

Authority: 26 U.S.C. 7805 * * * 

Section 54.4980G–6 also issued under 26 

U.S.C. 4980G. 

Section 54.4980G–7 also issued under 26 

U.S.C. 4980G. * * * 

■ Par. 2. Section 54.4980B–0 is 

amended by adding a new Q–11 to 

§ 54.4980B–2 in the list of questions to 

read as follows: 

§ 54.4980B–0 Table of contents. 

* * * * * 

List of Questions 

* * * * * 

§ 54.4980B–2 Plans that must comply. 

* * * * * 

Q–11: If a person is liable for the 

excise tax under section 4980B, what 

form must the person file and what is 

the due date for the filing and payment 

of the excise tax? 

* * * * * 

■ Par. 3. Section 54.4980B–2 is 

amended by adding a new Q&A–11 to 

read as follows: 

§ 54.4980B–2 Plans that must comply. 

* * * * * 

Q–11: If a person is liable for the 

excise tax under section 4980B, what 

form must the person file and what is 

the due date for the filing and payment 

of the excise tax? 

A–11: (a) In general. See §§ 54.6011– 

2 and 54.6151–1. 

(b) Due date for filing of return by 

employers or other persons responsible 

for benefits under a group health plan. 

See § 54.6071–1(a)(1). 

(c) Due date for filing of return by 

multiemployer plans. See § 54.6071– 

1(a)(2). 

(d) Effective/applicability date. In the 

case of an employer or other person 

mentioned in paragraph (b) of this Q & 

A–11, the rules in this Q & A–11 are 

effective for taxable years beginning on 

or after January 1, 2010. In the case of 

a plan mentioned in paragraph (c) of 

this Q & A–11, the rules in this Q & A– 

11 are effective for plan years beginning 

on or after January 1, 2010. 

■ Par. 4. Section 54.4980D–1 is added 

to read as follows: 

§ 54.4980D–1 Requirement of return and 

time for filing of the excise tax under 

section 4980D. 

Q–1: If a person is liable for the excise 

tax under section 4980D, what form 

must the person file and what is the due 

date for the filing and payment of the 

excise tax? 

A–1: (a) In general. See §§ 54.6011–2 

and 54.6151–1. 

(b) Due date for filing of return by 

employers. See § 54.6071–1(b)(1). 

(c) Due date for filing of return by 

multiemployer plans or multiple 

employer health plans. See § 54.6071– 

1(b)(2). 

(d) Effective/applicability date. In the 

case of an employer or other person 

mentioned in paragraph (b) of this Q & 

A–1, the rules in this Q & A–1 are 

effective for taxable years beginning on 

or after January 1, 2010. In the case of 

a plan mentioned in paragraph (c) of 

this Q & A–1, the rules in this Q & A– 

1 are effective for plan years beginning 

on or after January 1, 2010. 

■ Par. 5. Section 54.4980E–1 is added to 

read as follows: 

§ 54.4980E–1 Requirement of return and 

time for filing of the excise tax under 

section 4980E. 

Q–1: If a person is liable for the excise 

tax under section 4980E, what form 

must the person file and what is the due 

date for the filing and payment of the 

excise tax? 

A–1: (a) In general. See §§ 54.6011–2, 

54.6151–1 and 54.6071–1(c). 

(b) Effective/applicability date. The 

rules in this Q & A–1 are effective for 

plan years beginning on or after January 

1, 2010. 

■ Par. 6. Section 54.4980G–1 is 

amended by: 

■ 1. Revising the last sentence in A–1 

and adding a new sentence at the end 

of paragraph (a) in A–2. 

■ 2. Adding a new Q & A–5. 

The revisions and addition read as 

follows: 

§ 54.4980G–1 Failure of employer to make 

comparable health savings account 

contributions. 

* * * * * 

A–1: * * * But see Q & A–6 in 

§ 54.4980G–3 for treatment of 

collectively bargained employees and Q 

& A–1 in § 54.4980G–6 for the rules 

allowing larger comparable 

contributions to nonhighly compensated 

employees. 

* * * * * 

A–2: (a) * * * See also § 54.4980G–6 

for the rules allowing larger comparable 

contributions to nonhighly compensated 

employees. 

* * * * * 

Q–5: If a person is liable for the excise 

tax under section 4980G, what form 

must the person file and what is the due 

date for the filing and payment of the 

excise tax? 

A–5: (a) In general. §§ 54.6011–2, 

54.6151–1 and 54.6071–1(d). 

(b) Effective/applicability date. The 

rules in this Q & A–5 are effective for 

employer contributions made for 

calendar years beginning on or after 

January 1, 2010. 


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45998 Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Rules and Regulations 

■ Par. 7. Section 54.4980G–3 is 

amended by: 

■ 1. Revising the section heading. 

■ 2. Revising the introductory text in 

paragraph (a) of A–5. 

■ 3. Adding a new sentence at the end 

of paragraph (c) of A–5 and paragraph 

(a) of A–9. 

The revision and additions read as 

follows: 

§ 54.4980G–3 Failure of employer to make 

comparable health savings account 

contributions. 

* * * * * 

A–5: (a) Categories. The categories of 

employees for comparability testing are 

as follows (but see Q & A–6 of this 

section for the treatment of collectively 

bargained employees and Q & A–1 of 

§ 54.4980G–6 for a special rule for 

contributions made to the HSAs of 

nonhighly compensated employees)— 

* * * * * 

(c) * * * But see § 54.4980G–6 for a 

special rule for contributions made to 

the HSAs of nonhighly compensated 

employees. 

* * * * * 

A–9: (a) * * * See § 54.4980G–6 for a 

special rule for contributions made to 

the HSAs of nonhighly compensated 

employees. 

* * * * * 

■ Par. 8. Section 54.4980G–4 is 

amended by: 

■ 1. Adding a new sentence at the end 

of paragraph (a) of A–1. 

■ 2. Adding paragraphs (h), (i) and (j) to 

A–2. 

The additions read as follows: 

§ 54.4980G–4 Calculating comparable 

contributions. 

* * * * * 

A–1: (a) * * * But see Q & A–1 of 

§ 54.4980G–6 for a special rule for 

contributions made to the HSAs of 

nonhighly compensated employees. 

* * * * * 

A–2: * * * 

* * * * * 

(h) Maximum contribution permitted 

for all employees who are eligible 

individuals during the last month of the 

taxable year. An employer may 

contribute up to the maximum annual 

contribution amount for the calendar 

year (based on the employees’ HDHP 

coverage) to the HSAs of all employees 

who are eligible individuals on the first 

day of the last month of the employees’ 

taxable year, including employees who 

worked for the employer for less than 

the entire calendar year and employees 

who became eligible individuals after 

January 1st of the calendar year. For 

example, such contribution may be 

made on behalf of an eligible individual 

who is hired after January 1st or an 

employee who becomes an eligible 

individual after January 1st. Employers 

are not required to provide more than a 

pro-rata contribution based on the 

number of months that an individual 

was an eligible individual and 

employed by the employer during the 

year. However, if an employer 

contributes more than a pro-rata amount 

for the calendar year to the HSA of any 

eligible individual who is hired after 

January 1st of the calendar year or any 

employee who becomes an eligible 

individual any time after January 1st of 

the calendar year, the employer must 

contribute that same amount on an 

equal and uniform basis to the HSAs of 

all comparable participating employees 

(as defined in Q & A–1 in § 54.4980G– 

1) who are hired or become eligible 

individuals after January 1st of the 

calendar year. Likewise, if an employer 

contributes the maximum annual 

contribution amount for the calendar 

year to the HSA of any eligible 

individual who is hired after January 1st 

of the calendar year or any employee 

who becomes an eligible individual any 

time after January 1st of the calendar 

year, the employer must contribute the 

maximum annual contribution amount 

on an equal and uniform basis to the 

HSAs of all comparable participating 

employees (as defined in Q & A–1 in 

§ 54.4980G–1) who are hired or become 

eligible individuals after January 1st of 

the calendar year. An employer who 

makes the maximum calendar year 

contribution or more than a pro-rata 

contribution to the HSAs of employees 

who become eligible individuals after 

the first day of the calendar year or 

eligible individuals who are hired after 

the first day of the calendar year will 

not fail to satisfy comparability merely 

because some employees will have 

received more contributions on a 

monthly basis than employees who 

worked the entire calendar year. 

(i) Examples. The following examples 

illustrate the rules in paragraph (h) in 

this Q & A–2. In the following examples, 

no contributions are made through a 

section 125 cafeteria plan and none of 

the employees are covered by a 

collective bargaining agreement. 

Example 1. On January 1, 2010, Employer 

Q contributes $1,000 for the calendar year to 

the HSAs of employees who are eligible 

individuals with family HDHP coverage. In 

mid-March of the same year, Employer Q 

hires Employee A, an eligible individual with 

family HDHP coverage. On April 1, 2010, 

Employer Q contributes $1,000 to the HSA of 

Employee A. In September of the same year, 

Employee B becomes an eligible individual 

with family HDHP coverage. On October 1, 

2010, Employer G contributes $1,000 to the 

HSA of Employee B. Employer Q does not 

make any other contributions for the 2010 

calendar year. Employer Q’s contributions 

satisfy the comparability rules. 

Example 2. For the 2010 calendar year, 

Employer R only has two employees, 

Employee C and Employee D. Employee C, 

an eligible individual with family HDHP 

coverage, works for Employer R for the entire 

calendar year. Employee D, an eligible 

individual with family HDHP coverage works 

for Employer R from July 1st through 

December 31st. Employer R contributes 

$1,200 for the calendar year to the HSA of 

Employee C and $600 to the HSA of 

Employee D. Employer R does not make any 

other contributions for the 2010 calendar 

year. Employer R’s contributions satisfy the 

comparability rules. 

(j) Effective/applicability date. The 

rules in paragraphs (h) and (i) of Q & A– 

2 are effective for employer 

contributions made for calendar years 

beginning on or after January 1, 2010. 

* * * * * 

■ Par. 9. Section 54.4980G–6 is added 

to read as follows: 

§ 54.4980G–6 Special rule for 

contributions made to the HSAs of 

nonhighly compensated employees. 

Q–1: May an employer make larger 

contributions to the HSAs of nonhighly 

compensated employees than to the 

HSAs of highly compensated 

employees? 

A–1: Yes. Employers may make larger 

HSA contributions for nonhighly 

compensated employees who are 

comparable participating employees 

than for highly compensated employees 

who are comparable participating 

employees. See Q & A–1 in § 54.4980G– 

1 for the definition of comparable 

participating employee. For purposes of 

this section, highly compensated 

employee is defined under section 

414(q). Nonhighly compensated 

employees are employees that are not 

highly compensated employees. The 

comparability rules continue to apply 

with respect to contributions to the 

HSAs of all nonhighly compensated 

employees. Employers must make 

comparable contributions for the 

calendar year to the HSA of each 

nonhighly compensated employee who 

is a comparable participating employee. 

Q–2: May an employer make larger 

contributions to the HSAs of highly 

compensated employees than to the 

HSAs of nonhighly compensated 

employees? 

A–2: (a) In general. No. Employer 

contributions to HSAs for highly 

compensated employees who are 

comparable participating employees 

may not be larger than employer HSA 

contributions for nonhighly 


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Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Rules and Regulations 45999 

compensated employees who are 

comparable participating employees. 

The comparability rules continue to 

apply with respect to contributions to 

the HSAs of all highly compensated 

employees. Employers must make 

comparable contributions for the 

calendar year to the HSA of each highly 

compensated comparable participating 

employee. See Q & A–1 in § 54.4980G– 

1 for the definition of comparable 

participating employee. 

(b) Examples. The following examples 

illustrate the rules in Q & A–1 and Q & 

A–2 of this section. No contributions are 

made through a section 125 cafeteria 

plan and none of the employees in the 

following examples are covered by a 

collective bargaining agreement. All of 

the employees in the following 

examples have the same HDHP 

deductible for the same category of 

coverage. 

Example 1. In 2010, Employer A 

contributes $1,000 for the calendar year to 

the HSA of each full-time nonhighly 

compensated employee who is an eligible 

individual with self-only HDHP coverage. 

Employer A makes no contribution to the 

HSA of any full-time highly compensated 

employee who is an eligible individual with 

self-only HDHP coverage. Employer A’s HSA 

contributions for calendar year 2010 satisfy 

the comparability rules. 

Example 2. In 2010, Employer B 

contributes $2,000 for the calendar year to 

the HSA of each full-time nonhighly 

compensated employee who is an eligible 

individual with self-only HDHP coverage. 

Employer B also contributes $1,000 for the 

calendar year to the HSA of each full-time 

highly compensated employee who is an 

eligible individual with self-only HDHP 

coverage. Employer B’s HSA contributions 

for calendar year 2010 satisfy the 

comparability rules. 

Example 3. In 2010, Employer C 

contributes $1,000 for the calendar year to 

the HSA of each full-time nonhighly 

compensated employee who is an eligible 

individual with self-only HDHP coverage. 

Employer C contributes $2,000 for the 

calendar year to the HSA of each full-time 

highly compensated employee who is an 

eligible individual with self-only HDHP 

coverage. Employer C’s HSA contributions 

for calendar year 2010 do not satisfy the 

comparability rules. 

Example 4. In 2010, Employer D 

contributes $1,000 for the calendar year to 

the HSA of each full-time nonhighly 

compensated employee who is an eligible 

individual with self-only HDHP coverage. 

Employer D also contributes $1,000 to the 

HSA of each full-time highly compensated 

employee who is an eligible individual with 

self-only HDHP coverage. In addition, the 

employer contributes an additional $500 to 

the HSA of each nonhighly compensated 

employee who participates in a wellness 

program. The nonhighly compensated 

employees did not receive comparable 

contributions, and, therefore, Employer D’s 

HSA contributions for calendar year 2010 do 

not satisfy the comparability rules. 

Example 5. In 2010, Employer E 

contributes $1,000 for the calendar year to 

the HSA of each full-time non-management 

nonhighly compensated employee who is an 

eligible individual with family HDHP 

coverage. Employer E also contributes $500 

for the calendar year to the HSA of each fulltime management nonhighly compensated 

employee who is an eligible individual with 

family HDHP coverage. The nonhighly 

compensated employees did not receive 

comparable contributions, and, therefore, 

Employer E’s HSA contributions for calendar 

year 2010 do not satisfy the comparability 

rules. 

Q–3: May an employer make larger 

HSA contributions for employees with 

self plus two HDHP coverage than 

employees with self plus one HDHP 

coverage even if the employees with self 

plus two are all highly compensated 

employees and the employees with self 

plus one are all nonhighly compensated 

employees? 

A–3: (a) Yes. Q & A–1 in § 54.4980G– 

4 provides that an employer’s 

contribution with respect to the self 

plus two category of HDHP coverage 

may not be less than the contribution 

with respect to the self plus one 

category and the contribution with 

respect to the self plus three or more 

category may not be less than the 

contribution with respect to the self 

plus two category. Therefore, the 

comparability rules are not violated if 

an employer makes a larger HSA 

contribution for the self plus two 

category of HDHP coverage than to self 

plus one coverage, even if the 

employees with self plus two coverage 

are all highly compensated employees 

and the employees with self plus one 

coverage are all nonhighly compensated 

employees. Likewise, the comparability 

rules are not violated if an employer 

makes a larger HSA contribution for the 

self plus three category of HDHP 

coverage than to self plus two coverage, 

even if the employees with self plus 

three coverage are all highly 

compensated employees and the 

employees with self plus two coverage 

are all nonhighly compensated 

employees. 

(b) Example. The following example 

illustrates the rules in paragraph (a) of 

this Q & A–3. In the following example, 

no contributions are made through a 

section 125 cafeteria plan and none of 

the employees are covered by a 

collective bargaining agreement. 

Example. In 2010, Employer F contributes 

$1,000 for the calendar year to the HSA of 

each full-time employee who is an eligible 

individual with self plus one HDHP 

coverage. Employer F contributes $1,500 for 

the calendar year to the HSA of each 

employee who is an eligible individual with 

self plus two HDHP coverage. The deductible 

for both the self plus one HDHP and the self 

plus two HDHP is $2,000. Employee A, an 

eligible individual, is a nonhighly 

compensated employee with self plus one 

coverage. Employee B, an eligible individual, 

is a highly compensated employee with self 

plus two coverage. For the 2010 calendar 

year, Employer F contributes $1,000 to 

Employee A’s HSA and $1,500 to Employee 

B’s HSA. Employer F’s HSA contributions 

satisfy the comparability rules. 

Q–4: What is the effective date for the 

rules in this section? 

A–4: The rules in this section are 

effective for employer contributions 

made for calendar years beginning on or 

after January 1, 2010. 

■ Par. 10. Section 54.4980G–7 is added 

to read as follows: 

§ 54.4980G–7 Special comparability rules 

for qualified HSA distributions contributed 

to HSAs on or after December 20, 2006 and 

before January 1, 2012. 

Q–1: How do the comparability rules 

of section 4980G apply to qualified HSA 

distributions under section 106(e)(2)? 

A–1: The comparability rules of 

section 4980G do not apply to amounts 

contributed to employee HSAs through 

qualified HSA distributions. However, 

in order to satisfy the comparability 

rules, if an employer offers qualified 

HSA distributions, as defined in section 

106(e)(2), to any employee who is an 

eligible individual covered under any 

HDHP, the employer must offer 

qualified HSA distributions to all 

employees who are eligible individuals 

covered under any HDHP. However, if 

an employer offers qualified HSA 

distributions only to employees who are 

eligible individuals covered under the 

employer’s HDHP, the employer is not 

required to offer qualified HSA 

distributions to employees who are 

eligible individuals but are not covered 

under the employer’s HDHP. 

Q–2: What is the effective date for the 

rules in this section? 

A–2: The rules in this section are 

effective for are effective for employer 

contributions made for calendar years 

beginning on or after January 1, 2010. 

■ Par. 11. Section 54.6011–2 is added to 

read as follows: 

§ 54.6011–2 General requirement of return, 

statement, or list. 

Effective for any Form 8928 that is 

due on or after January 1, 2010, any 

person liable for tax under section 

4980B, 4980D, 4980E, or 4980G of the 

Code shall file a return with respect to 

the tax on Form 8928. The return must 

include the information required by 

Form 8928 and the instructions issued 

with respect to it. 


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46000 Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Rules and Regulations 

■ Par. 12. Section 54.6061–1 is added to 

read as follows: 

§ 54.6061–1 Signing of returns and other 

documents. 

Effective for any Form 8928 that is 

due on or after January 1, 2010, any 

return, statement, or other document 

required to be made with respect to a 

tax imposed by section 4980B, 4980D, 

4980E, or 4980G of the Code or the 

regulations under section 4980B, 4980D, 

4980E, or 4980G must be signed by the 

person required to file the return, 

statement, or other document, or by the 

persons required or duly authorized to 

sign in accordance with the regulations, 

forms, or instructions prescribed with 

respect to such return, statement, or 

document. An individual’s signature on 

such return, statement, or other 

document shall be prima facie evidence 

that the individual is authorized to sign 

the return, statement, or other 

document. 

■ Par. 13. Section 54.6071–1 is added to 

read as follows: 

§ 54.6071–1 Time for filing returns. 

(a) Returns under section 4980B. (1) 

Due date for filing of return by 

employers or other persons responsible 

for benefits under a group health plan. 

If the person liable for the excise tax is 

an employer or other person responsible 

for providing or administering benefits 

under a group health plan (such as an 

insurer or a third party administrator), 

the return required by § 54.6011–2 must 

be filed on or before the due date for 

filing the person’s income tax return 

and must reflect the portion of the 

noncompliance period for each failure 

under section 4980B that falls during 

the person’s taxable year. An extension 

to file the person’s income tax return 

does not extend the date for filing Form 

8928. 

(2) Due date for filing of return by 

multiemployer plans. If the person 

liable for the excise tax is a 

multiemployer plan, the return required 

by § 54.6011–2 must be filed on or 

before the last day of the seventh month 

following the end of the plan’s plan 

year. The filing of Form 8928 by a plan 

must reflect the portion of the 

noncompliance period for each failure 

under section 4980B that falls during 

the plan’s plan year. 

(b) Returns under section 4980D. (1) 

Due date for filing of return by 

employers. If the person liable for the 

excise tax is an employer, the return 

required by § 54.6011–2 must be filed 

on or before the due date for filing the 

employer’s income tax return and must 

reflect the portion of the noncompliance 

period for each failure under chapter 

100 that falls during the employer’s 

taxable year. An extension to file the 

employer’s income tax return does not 

extend the date for filing Form 8928. 

(2) Due date for filing of return by 

multiemployer plans or multiple 

employer health plans. If the person 

liable for the excise tax is a 

multiemployer plan or a specified 

multiple employer health plan, the 

return required by § 54.6011–2 must be 

filed on or before the last day of the 

seventh month following the end of the 

plan’s plan year. The filing of Form 

8928 by a plan must reflect the portion 

of the noncompliance period for each 

failure under chapter 100 that falls 

during the plan’s plan year. 

(c) Returns under section 4980E. Any 

employer who is liable for the excise tax 

under section 4980E must report this tax 

by filing the return required by 

§ 54.6011–2 on or before the 15th day of 

the fourth month following the calendar 

year in which the noncomparable 

contributions were made. 

(d) Returns under section 4980G. Any 

employer who is liable for the excise tax 

under section 4980E must report this tax 

by filing the return required by 

§ 54.6011–2 on or before the 15th day of 

the fourth month following the calendar 

year in which the noncomparable 

contributions were made. See Q & A–4 

of § 54.4980G–1 for the rules on 

computation of the excise tax under 

section 4980G. 

(e) Effective/applicability date: The 

rules in this section are effective for any 

Form 8928 that is due on or after 

January 1, 2010. 

■ Par. 14. Section 54.6091–1 is added to 

read as follows: 

§ 54.6091–1 Place for filing excise tax 

returns under section 4980B, 4980D, 4980E, 

or 4980G. 

Effective for any Form 8928 that is 

due on or after January 1, 2010, the 

return required by § 54.6011–2 must be 

filed at the place specified in the forms 

and instructions provided by the 

Internal Revenue Service. 

■ Par. 15. Section 54.6151–1 is added to 

read as follows: 

§ 54.6151–1 Time and place for paying of 

tax shown on returns. 

Effective for any Form 8928 that is 

due on or after January 1, 2010, the tax 

shown on any return which is imposed 

under section 4980B, 4980D, 4980E or 

4980G shall, without assessment or 

notice and demand, be paid to the 

internal revenue officer with whom the 

return is filed at the time and place for 

filing such return (determined without 

regard to any extension of time for filing 

the return). For provisions relating to 

the time and place for filing such return, 

see §§ 54.6071–1 and 54.6091–1. 

Linda E. Stiff, 

Deputy Commissioner for Services and 

Enforcement. 

Approved: August 20, 2009. 

Michael Mundaca, 

Assistant Secretary of the Treasury (Tax 

Policy). 

[FR Doc. E9–21225 Filed 9–4–09; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Office of Foreign Assets Control 

31 CFR Part 515 

Cuban Assets Control Regulations 

AGENCY: Office of Foreign Assets 

Control, Treasury. 

ACTION: Final rule. 

SUMMARY: The Department of the 

Treasury’s Office of Foreign Assets 

Control (‘‘OFAC’’) is amending the 

Cuban Assets Control Regulations to 

implement the President’s initiative of 

April 13, 2009, to promote greater 

contact between separated family 

members in the United States and Cuba 

and to increase the flow of remittances 

and information to the Cuban people. 

These amendments also implement 

provisions of the Omnibus 

Appropriations Act, 2009. 

DATES: Effective Date: September 3, 

2009. 

FOR FURTHER INFORMATION CONTACT: 

Assistant Director for Compliance, 

Outreach & Implementation, tel.: 202– 

622–2490, Assistant Director for 

Licensing, tel.: 202–622–2480; Assistant 

Director for Policy, tel.: 202–622–4855, 

or Chief Counsel (Foreign Assets 

Control), tel.: 202–622–2410 (not toll 

free numbers). 

SUPPLEMENTARY INFORMATION: 

Electronic and Facsimile Availability 

This document and additional 

information concerning OFAC are 

available from OFAC’s Web site 

(www.treas.gov/ofac) or via facsimile 

through a 24-hour fax-on demand 

service, tel.: 202–622–0077. 

Background 

The Cuban Assets Control 

Regulations, 31 CFR part 515 (‘‘CACR’’), 

were issued by the U.S. Government on 

July 8, 1963, under the Trading With the 

Enemy Act (50 U.S.C. App. 5 et seq.). 

Today, OFAC is amending the CACR to 

implement measures announced by the 

President on April 13, 2009, to promote 


CPrice-Sewell on DSKGBLS3C1PROD with RULES