§ 4980E. — Failure of employer to make comparable medical savings account contributions.
[Laws in effect as of January 7, 2003]
[Document not affected by Public Laws enacted between
January 7, 2003 and December 19, 2003]
[CITE: 26USC4980E]
TITLE 26--INTERNAL REVENUE CODE
Subtitle D--Miscellaneous Excise Taxes
CHAPTER 43--QUALIFIED PENSION, ETC., PLANS
Sec. 4980E. Failure of employer to make comparable Archer MSA
contributions
(a) General rule
In the case of an employer who makes a contribution to the Archer
MSA of any employee with respect to coverage under a high deductible
health plan of the employer during a calendar year, there is hereby
imposed a tax on the failure of such employer to meet the requirements
of subsection (d) for such calendar year.
(b) Amount of tax
The amount of the tax imposed by subsection (a) on any failure for
any calendar year is the amount equal to 35 percent of the aggregate
amount contributed by the employer to Archer MSAs of employees for
taxable years of such employees ending with or within such calendar
year.
(c) Waiver by Secretary
In the case of a failure which is due to reasonable cause and not to
willful neglect, the Secretary may waive part or all of the tax imposed
by subsection (a) to the extent that the payment of such tax would be
excessive relative to the failure involved.
(d) Employer required to make comparable MSA contributions for all
participating employees
(1) In general
An employer meets the requirements of this subsection for any
calendar year if the employer makes available comparable
contributions to the Archer MSAs of all comparable participating
employees for each coverage period during such calendar year.
(2) Comparable contributions
(A) In general
For purposes of paragraph (1), the term ``comparable
contributions'' means contributions--
(i) which are the same amount, or
(ii) which are the same percentage of the annual
deductible limit under the high deductible health plan
covering the employees.
(B) Part-year employees
In the case of an employee who is employed by the employer
for only a portion of the calendar year, a contribution to the
Archer MSA of such employee shall be treated as comparable if it
is an amount which bears the same ratio to the comparable amount
(determined without regard to this subparagraph) as such portion
bears to the entire calendar year.
(3) Comparable participating employees
For purposes of paragraph (1), the term ``comparable
participating employees'' means all employees--
(A) who are eligible individuals covered under any high
deductible health plan of the employer, and
(B) who have the same category of coverage.
For purposes of subparagraph (B), the categories of coverage are
self-only and family coverage.
(4) Part-time employees
(A) In general
Paragraph (3) shall be applied separately with respect to
part-time employees and other employees.
(B) Part-time employee
For purposes of subparagraph (A), the term ``part-time
employee'' means any employee who is customarily employed for
fewer than 30 hours per week.
(e) Controlled groups
For purposes of this section, all persons treated as a single
employer under subsection (b), (c), (m), or (o) of section 414 shall be
treated as 1 employer.
(f) Definitions
Terms used in this section which are also used in section 220 have
the respective meanings given such terms in section 220.
(Added Pub. L. 104-191, title III, Sec. 301(c)(4)(A), Aug. 21, 1996, 110
Stat. 2049; amended Pub. L. 106-554, Sec. 1(a)(7) [title II,
Sec. 202(a)(8), (b)(2)(D)], Dec. 21, 2000, 114 Stat. 2763, 2763A-629;
Pub. L. 107-147, title IV, Sec. 417(17)(A), Mar. 9, 2002, 116 Stat. 56.)
Amendments
2002--Pub. L. 107-147 substituted ``Archer MSA contributions'' for
``medical savings account contributions'' in section catchline.
2000--Subsec. (a). Pub. L. 106-554, Sec. 1(a)(7) [title II,
Sec. 202(a)(8)], substituted ``Archer MSA'' for ``medical savings
account''.
Subsecs. (b), (d)(1). Pub. L. 106-554, Sec. 1(a)(7) [title II,
Sec. 202(b)(2)(D)], substituted ``Archer MSAs'' for ``medical savings
accounts''.
Subsec. (d)(2)(B). Pub. L. 106-554, Sec. 1(a)(7) [title II,
Sec. 202(a)(8)], substituted ``Archer MSA'' for ``medical savings
account''.
Effective Date
Section applicable to taxable years beginning after Dec. 31, 1996,
see section 301(j) of Pub. L. 104-191, set out as an Effective Date of
1996 Amendment note under section 62 of this title.
Section Referred to in Other Sections
This section is referred to in sections 106, 4980G of this title.
