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FREQUENTLY ASKED QUESTIONS
HSA > Businesses & Employers > Frequently Asked Questions
Does an employer own or control their employees' HSA funds?
• No. All HSA funds are the property of the employee regardless of where the
contribution originated.
What if an employee wants to fund the HSA with pre-tax money?
• Employees can fund the HSA with either after-tax money or pre-tax money. Pre-tax contributions
require the use of a Section 125 plan, also known as a "cafeteria plan" or "salary reduction".
Are contributions made by a partnership, LLC, or S-Corp to its owners handled differently than employee contributions?
• Yes. These contributions are treated as
distributions to the owners that are taxable income. The recipient can take an HSA deduction from his or her personal tax return.
Can an owner of a partnership, LLC, or S-Corp make a pre-tax contribution to their HSA through a Section 125 plan?
• No. But they can make their own personal HSA
contributions and take the "above the line" deduction on their personal income taxes.
Is it possible for a self-employed sole proprietor to make pre-tax contributions to their HSA?
• No. A sole proprietor may only contribute to an HSA with after-tax
dollars and take the "above the line" deduction on their personal income taxes.
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