4.13 SR 05-06-2024 - Laserfiche WebLink

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© 2012 Hitesman & Wold, P.A. City of Elk River Flexible Benefits Plan 40 If a Participant to whom this special rule applies ceases to be eligible for HSA contributions within the twelve (12) month period beginning with the last month of such taxable year other than by reason of death or disability (as described in Section 72(m)(7) of the Code), then any contribution made in excess of the annual limit under the general rule described above will be included in the Participant’s gross income and will be subject to an excise tax as provided in Section 223(b)(8)(B) of the Code. (e) Special Rule for Married Participants. If the Participant is married and both the Participant and Participant’s Spouse have coverage under a high deductible health plan (as defined in Section 223 of the Code), the applicable limit is divided equally between them (unless they agree to a different allocation). (f) Rollover Contributions. Rollover contributions may also be made to the HSA from another health savings account or from an Archer MSA. Rollover contributions are not subject to the contribution limit described above. (g) Treatment of Excess Contributions. To the extent total contributions to a Participant’s health savings accounts made during the taxable year exceed the applicable limit on such contributions, then the contributions in excess of the limit shall be included in the Participant’s gross income and shall be subject to an excise tax as provided in Section 4973(g) of the Code, unless returned in accordance with Section 223(f)(3) of the Code. 16.7 Investment of HSA Funds. A Participant may invest his or her HSA funds as allowed by the HSA trustee/custodian. The Employer shall have no control or responsibility for how a Participant’s HSA funds are invested. 16.8 Tax Consequences. It is intended that the HSA contributions made under this Plan shall be excluded from the Participant’s gross income under Section 223 of the Code. 16.9 Distribution of HSA Funds. The Employer shall have no responsibility or control over distributions made from a Participant’s HSA. The Employer shall have no responsibility to substantiate expenses for which such distributions are made. Sections 6.7 and 6.8 of this Plan shall not apply to distributions from a Participant’s HSA. A Participant need not be a Participant in this Plan, be covered by a High Deductible Health Plan of this Employer, nor be covered by any other high deductible health plan in order to receive a distribution from the Participant’s HSA. 16.10 Reporting. The Employer shall be responsible for reporting contributions made to a Participant’s HSA through this Plan on the Participant’s Form W-2. Participants shall be responsible for reporting contributions to their HSAs and distributions from their HSAs on appropriate forms. Participants shall also be responsible for determining whether an HSA distribution is taxable. 16.11 Continuation of Coverage. This HSA Contribution Feature and the underlying HSAs are not group health plans for purposes of the Consolidated Omnibus Budget Reconciliation Act of 1985, (“COBRA”), as amended, and reflected in the Public Health Services Act (“PHSA”), as amended, the Family and Medical Leave Act (“FMLA”), and the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”). COBRA, FMLA, and USERRA do not apply to this HSA Contribution Feature and the underlying HSAs. Page 133 of 254