Can pre-tax salary reduction contributions be made to an HSA?
Yes. As indicated above, an employee may make pre-tax salary reduction contributions under an HSA, but these contributions must be made to a cafeteria plan. They are treated as employer contributions and are excluded from the employee’s income and employment taxes. Code Section 125 has been amended to allow HSAs to be offered under cafeteria plans. Even though these contributions are made under a cafeteria plan, these HSA contributions must be contributed to a trust and the claim substantiation requirements do not apply. Employers can provide negative elections for HSA contributions if provided through a cafeteria plan.
