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What Type of Employee can get a Pre-Tax HSA Contribution?

Lively · April 11, 2018 · 3 min read


Helping employees contribute pre-tax dollars to their HSA means you are creating an automated way for employees to save for health costs. It just might be the easiest and most cost-effective health benefit you can offer. Understanding how your corporate structure and employee category type will affect these contributions will get you prepared to add an HSA to your benefits offering. You don’t need to wait til next open enrollment to add an HSA, they are one of the few benefits changes you can make any time.

 Employer Pre-Tax HSA Contribution Requirements

  • Eligible Corporate Structures

    • C-Corp

    • LLC / LLP – these corporation types must be taxed as a corporation to allow for pre-tax HSA contributions.

    • S-Corp – any person who owns more than 2% of the company is ineligible to receive pre-tax contributions because they are considered an owner by the IRS.

    • Sole Proprietorship – owners cannot receive pre-tax contributions, but the sole prop’s non-familial employees can if set-up correctly.

  • Section 125 Cafeteria Plan

What is a Section 125 Cafeteria Plan?

A Section 125 Cafeteria Plan is a written plan maintained by an employer where the participants of the plan can receive benefits on a pre-tax basis via salary reduction. Employers can still offer an HSA without a Section 125 Cafeteria Plan. They just can’t make or offer pre-tax HSA contributions for employees.

Employee Requirements

First and foremost, employees must have an HSA-Eligible Healthcare Plan to contribute to an HSA.

Contribution eligibility is defined on a month by month basis (defined by tax year, not health plan calendar). On top of that, employers need to make sure plan year HSA contributions (over two plan years) are in compliance with the calendar year contribution limits.

Employment Type

  • Full-time Employees

  • Part-time Employees / Contractor

  • Collectively Bargained Employees

The good news is that all employee types can make or receive pre-tax HSA contributions, as long as they are eligible. It is rare that part-time employees will receive medical benefits as part of their employment, but if they do (and their plan is HSA-eligible), they can make or receive pre-tax HSA contributions.

In fact, employers can still contribute to their former employees’ HSA, as long as they still have a qualified HSA-eligible health plan.

Helping employees save pre-tax dollars for their HSA limits the real dollar cost of healthcare. No matter the corporate structure or employment type, it all starts with an HSA-eligible health plan. Make sure that is part of your benefits offering.

If you need more help with health account decisions, check out our blog. We will make you a healthcare benefits expert in no time, without any extra work or effort on your end.



Lively is the modern HSA experience built for—and by—those seeking stability in the ever-shifting healthcare landscape. By harnessing modern innovation and deep industry expertise, Lively is committed to bridging today’s savings with tomorrow’s unknowns. Unlike traditional institutions hindered by bureaucracy, Lively’s commitment extends beyond initial set up to providing dedicated, ongoing support and education for every step. So each HSA can reach its maximum potential with minimal headache.

piggy bank on pink background


2024 and 2025 HSA Maximum Contribution Limits

Lively · May 9, 2024 · 3 min read

On May 9, 2024 the Internal Revenue Service announced the HSA contribution limits for 2025. For 2025 HSA-eligible account holders are allowed to contribute: $4,300 for individual coverage and $8,500 for family coverage. If you are 55 years or older, you’re still eligible to contribute an extra $1,000 catch-up contribution.

comparing hsa versus fsa


What is the Difference Between a Flexible Spending Account and a Health Savings Account?

Lauren Hargrave · February 9, 2024 · 12 min read

A Health Savings Account (HSA) and Healthcare Flexible Spending Account (FSA) provide up to 30% savings on out-of-pocket healthcare expenses. That’s good news. Except you can’t contribute to an HSA and Healthcare FSA at the same time. So what if your employer offers both benefits? How do you choose which account type is best for you? Let’s explore the advantages of each to help you decide which wins in HSA vs FSA.

Benefits of HSA employer matching

Health Savings Accounts

Ways Health Savings Account Matching Benefits Employers

Lauren Hargrave · October 13, 2023 · 7 min read

Employers need employees to adopt and engage with their benefits and one way to encourage employees to adopt and contribute to (i.e. engage with) an HSA, is for employers to match employees’ contributions.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.



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