26 U.S.C. § 4980E — Failure of employer to make comparable Archer MSA contributions

(a) If an employer contributes to an employee's Archer MSA with respect to coverage under a high deductible health plan of the employer during a calendar year, the employer owes a tax if it fails to meet subsection (d)'s requirements for that calendar year. (b) For any failure during a calendar year, the tax is 35% of the total amount the employer contributed to employees' Archer MSAs for the employees' tax years ending in or within that calendar year. (c) If the failure had reasonable cause and was not caused by willful neglect, the Secretary^* may waive all or part of the tax if paying it would be excessive compared with the failure. (d)(1) An employer meets this subsection for a calendar year if, for each coverage period during that year, it makes comparable contributions to the Archer MSAs of all comparable participating employees. (d)(2)(A) “Comparable contributions” means contributions that are either (i) the same amount or (ii) the same percentage of the annual deductible limit under the high deductible health plan covering the employees. (d)(2)(B) If an employee^* works for the employer during only part of the calendar year, the contribution to that employee's Archer MSA counts as comparable if it bears the same ratio to the comparable amount, calculated without this subparagraph, as the employee's portion of the year bears to the entire calendar year. (d)(3) “Comparable participating employees” means all employees who (A) are eligible individuals covered under any high deductible health plan of the employer and (B) have the same category of coverage. The categories of coverage are self-only coverage and family coverage. (d)(4)(A) The rule in paragraph (3) is applied separately to part-time employees and other employees. (d)(4)(B) “Part-time employee” means an employee who is customarily employed for fewer than 30 hours per week. (e) For this section, all persons treated as one employer under section 414(b), (c), (m), or (o) are treated as one employer. (f) Terms used in this section that are also used in section 220 have the meanings given to them in section 220. This section does not define those terms.