Questions and Answers

No, if the provider (custodian/trustee) deposits the incentive into the HSA. The Department of Labor (DOL) stated in Advisory Opinion 2004-09A that, in certain situations, an HSA provider would not violate the prohibited transaction provisions under Internal Revenue Code Section 4975(c) or Employee Retirement Income Security Act (ERISA) Section 406 where the HSA provider offers an incentive to individuals for establishing an HSA with that provider by depositing cash directly into the individual’s HSA. A cash contribution to an HSA generally would not be considered a “sale or exchange of property” or “a transfer of plan assets” for purposes of the prohibited transaction provisions of the Code. Because the cash contribution goes to the HSA and not the HSA owner, the HSA’s receipt of the cash contribution also would not be considered an act of self dealing on the part of the HSA owner nor a receipt by the HSA owner in his/her individual capacity of any consideration from a party dealing with the HSA. Source: DOL Field Assistance Bulletin 2006-02.