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USC Title 26 enacted through 2008

§ 106. Contributions by employer to accident and health plans

 
(a)
General rule
 
Except as otherwise provided in this section, gross income of an employee does not include employer-provided coverage under an accident or health plan.
 
(b)
Contributions to Archer MSAs
 
(1)
In general
 
In the case of an employee who is an eligible individual, amounts contributed by such employee's employer to any Archer MSA of such employee shall be treated as employer-provided coverage for medical expenses under an accident or health plan to the extent such amounts do not exceed the limitation under section 220(b)(1) (determined without regard to this subsection) which is applicable to such employee for such taxable year.
 
(2)
No constructive receipt
 
No amount shall be included in the gross income of any employee solely because the employee may choose between the contributions referred to in paragraph (1) and employer contributions to another health plan of the employer.
 
(3)
Special rule for deduction of employer contributions
 
Any employer contribution to an Archer MSA, if otherwise allowable as a deduction under this chapter, shall be allowed only for the taxable year in which paid.
 
(4)
Employer MSA contributions required to be shown on return
 
Every individual required to file a return under section 6012 for the taxable year shall include on such return the aggregate amount contributed by employers to the Archer MSAs of such individual or such individual's spouse for such taxable year.
 
(5)
MSA contributions not part of COBRA coverage
 
Paragraph (1) shall not apply for purposes of section 4980B.
 
(6)
Definitions
 
For purposes of this subsection, the terms "eligible individual" and "Archer MSA" have the respective meanings given to such terms by section 220.
 
(7)
Cross reference
 
For penalty on failure by employer to make comparable contributions to the Archer MSAs of comparable employees, see section 4980E.
 
(c)
Inclusion of long-term care benefits provided through flexible spending arrangements
 
(1)
In general
 
Effective on and after January 1, 1997, gross income of an employee shall include employer-provided coverage for qualified long-term care services (as defined in section 7702B(c)) to the extent that such coverage is provided through a flexible spending or similar arrangement.
 
(2)
Flexible spending arrangement
 
For purposes of this subsection, a flexible spending arrangement is a benefit program which provides employees with coverage under which -
 
(A)
specified incurred expenses may be reimbursed (subject to reimbursement maximums and other reasonable conditions), and
 
(B)
the maximum amount of reimbursement which is reasonably available to a participant for such coverage is less than 500 percent of the value of such coverage.
 
In the case of an insured plan, the maximum amount reasonably available shall be determined on the basis of the underlying coverage.
 
(d)
Contributions to health savings accounts
 
(1)
In general
 
In the case of an employee who is an eligible individual (as defined in section 223(c)(1)), amounts contributed by such employee's employer to any health savings account (as defined in section 223(d)) of such employee shall be treated as employer-provided coverage for medical expenses under an accident or health plan to the extent such amounts do not exceed the limitation under section 223(b) (determined without regard to this subsection) which is applicable to such employee for such taxable year.
 
(2)
Special rules
 
Rules similar to the rules of paragraphs (2), (3), (4), and (5) of subsection (b) shall apply for purposes of this subsection.
 
(3)
Cross reference
 
For penalty on failure by employer to make comparable contributions to the health savings accounts of comparable employees, see section 4980G.
 
(e)
FSA and HRA terminations to fund HSAs
 
(1)
In general
 
A plan shall not fail to be treated as a health flexible spending arrangement or health reimbursement arrangement under this section or section 105 merely because such plan provides for a qualified HSA distribution.
 
(2)
Qualified HSA distribution
 
The term "qualified HSA distribution" means a distribution from a health flexible spending arrangement or health reimbursement arrangement to the extent that such distribution -
 
(A)
does not exceed the lesser of the balance in such arrangement on September 21, 2006, or as of the date of such distribution, and
 
(B)
is contributed by the employer directly to the health savings account of the employee before January 1, 2012.
 
Such term shall not include more than 1 distribution with respect to any arrangement.
 
(3)
Additional tax for failure to maintain high deductible health plan coverage
 
(A)
In general
 
If, at any time during the testing period, the employee is not an eligible individual, then the amount of the qualified HSA distribution -
 
(i)
shall be includible in the gross income of the employee for the taxable year in which occurs the first month in the testing period for which such employee is not an eligible individual, and
 
(ii)
the tax imposed by this chapter for such taxable year on the employee shall be increased by 10 percent of the amount which is so includible.
 
(B)
Exception for disability or death
 
Clauses (i) and (ii) of subparagraph (A) shall not apply if the employee ceases to be an eligible individual by reason of the death of the employee or the employee becoming disabled (within the meaning of section 72(m)(7)).
 
(4)
Definitions and special rules
 
For purposes of this subsection -
 
(A)
Testing period
 
The term "testing period" means the period beginning with the month in which the qualified HSA distribution is contributed to the health savings account and ending on the last day of the 12th month following such month.
 
(B)
Eligible individual
 
The term "eligible individual" has the meaning given such term by section 223(c)(1).
 
(C)
Treatment as rollover contribution
 
A qualified HSA distribution shall be treated as a rollover contribution described in section 223(f)(5).
 
(5)
Tax treatment relating to distributions
 
For purposes of this title -
 
(A)
In general
 
A qualified HSA distribution shall be treated as a payment described in subsection (d).
 
(B)
Comparability excise tax
 
(i)
In general
 
Except as provided in clause (ii), section 4980G shall not apply to qualified HSA distributions.
 
(ii)
Failure to offer to all employees
 
In the case of a qualified HSA distribution to any employee, the failure to offer such distribution to any eligible individual covered under a high deductible health plan of the employer shall (notwithstanding section 4980G(d)) be treated for purposes of section 4980G as a failure to meet the requirements of section 4980G(b).








Tax Code (Internal Revenue Code) Section Index


U.S. GAAP by Codification Topic
 
105 GAAP Hierarchy
105 GAAP History

205 Presentation of Financial Statements
205-20 Discontinued Operations
210 Balance Sheet
210-20 Offsetting
220 Comprehensive Income
225 Income Statement
225-20 Extraordinary and Unusual Items
230 Statement of Cash Flows
250 Accounting Changes and Error Corrections
260 Earnings per Share
270 Interim Reporting

310 Impairment of a Loan
320 Investment Securities
320 Other-Than-Temporary Impairments, FSP FAS 115-2
320-10-05 Overview of Investments in Other Entities
320-10-35 Reclassification of Investments in Securities
323-10 Equity Method Investments
323-30 Investments in Partnerships and Joint Ventures
325-20 Cost Method Investments
330 Inventory

340-20 Capitalized Advertising Costs
350-20 Goodwill
350-30 Intangibles Other than Goodwill
350-40 Internal-Use Software
350-50 Website Development Costs
360 Property, Plant and Equipment
360-20 Real Estate Sales

410 Asset Retirement and Environmental Obligations
420 Exit or Disposal Cost Obligations
450 Contingencies
450-20 Loss Contingencies
450-30 Gain Contingencies
480 Redeemable Financial Instruments

505-20 Stock Dividends, Stock Splits
505-30 Treasury Stock

605 SEC Staff Accounting Bulletin, Topic 13
605-25 Revenue Recognition - Multiple Element Arrangements

715-30 Defined Benefit Plans - Pension
718 Share-Based Payment
730 Research and Development
730-20 Research and Development Arrangements

805 Business Combinations
810 Consolidation
810 Noncontrolling Interests
810 Consolidation of Variable Interest Entities, SFAS 167

815 Derivatives and Hedging Overview

820 Fair Value Measurements
820 Fair value when the markets are not active, FSP FAS 157-4
825 Fair Value Option

830 Foreign Currency Matters
830-20 Foreign Currency Transactions
830-30 Translation of Financial Statements
835 Interest
835-20 Capitalization of Interest
835-30 Imputation of Interest

840 Leases
840-20 Operating Leases
840-30 Capital Leases
840-40 Sale-Leaseback Transactions
845 Nonmonetary Transactions

855 Subsequent Events
860-20 Sale of Financial Assets, SFAS 166
860-50 Servicing Assets and Liabilities, SFAS 156

985-20 Costs of software to be sold


U.S. GAAP Codification
Accounting Topics
Tax Code (Internal Revenue Code) Section Index




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