I.R.C. § 4980E(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.
I.R.C. § 4980E(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.
I.R.C. § 4980E(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.
I.R.C. § 4980E(d) Employer Required To Make Comparable MSA Contributions For All Participating Employees
I.R.C. § 4980E(d)(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.
I.R.C. § 4980E(d)(2) Comparable Contributions
I.R.C. § 4980E(d)(2)(A) In General —
For purposes of paragraph (1), the term “comparable contributions” means contributions—-
I.R.C. § 4980E(d)(2)(A)(i) —
which are the same amount, or
I.R.C. § 4980E(d)(2)(A)(ii) —
which are the same percentage of the annual deductible limit under the high deductible
health plan covering the employees.
I.R.C. § 4980E(d)(2)(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.
I.R.C. § 4980E(d)(3) Comparable Participating Employees —
For purposes of paragraph (1), the term “comparable participating employees” means
all employees—-
I.R.C. § 4980E(d)(3)(A) —
who are eligible individuals covered under any high deductible health plan of the
employer, and
I.R.C. § 4980E(d)(3)(B) —
who have the same category of coverage. For purposes of subparagraph (B), the categories
of coverage are self-only and family coverage.
I.R.C. § 4980E(d)(4) Part-Time Employees
I.R.C. § 4980E(d)(4)(A) In General —
Paragraph (3) shall be applied separately with respect to part-time employees and
other employees.
I.R.C. § 4980E(d)(4)(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.
I.R.C. § 4980E(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.
I.R.C. § 4980E(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), Aug. 21, 1996; Amended by Pub. L. 106-554, Sec. 202, Dec. 21, 2000, 114 Stat. 2763; Pub. L. 107-147, title IV, Sec. 417(17)(A), Mar. 9, 2002, 116 Stat. 21.)
BACKGROUND NOTES
AMENDMENTS
2002—Sec. 4980E. Pub. L. 107-147, Sec. 417(17)(A), amended the heading by subsituting “FAILURE OF EMPLOYER TO MAKE COMPARABLE ARCHER
MSA CONTRIBUTIONS” for “FAILURE OF EMPLOYER TO MAKE COMPARABLE MEDICAL SAVINGS ACCOUNT
CONTRIBUTIONS”.
2000--Subsec. (a). Pub. L. 106-554, Sec. 202, substituted
“Archer MSA” for “medical savings account”.
Subsec. (b). Pub. L. 106-554, Sec. 202, substituted “Archer MSAs” for “medical savings accounts”.
Subsec. (d)(1). Pub. L. 106-554, Sec. 202, substituted “Archer MSAs” for “medical savings accounts”.
Subsec. (d)(2)(B). Pub. L. 106-554, Sec. 202, substituted “Archer MSA” for “medical savings account”.
EFFECTIVE DATE OF 2002 AMENDMENT
Amendment by Sec. 417(17)(A) of Pub. L. 107-147 effective on the date of the enactment of this Act [enacted: Mar. 9, 2002].
EFFECTIVE DATE OF 2000 AMENDMENTS
Amendments by Sec. 202 of Pub. L. 106-554 effective on the date of the enactment of this Act [enacted: Dec. 21, 2000].
EFFECTIVE DATE
Section applicable to taxable years beginning after Dec. 31, 1996.
