IRS Prop. Regs. on Employer Comparable Contributions to Health by fxx80801

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									                                                                       Federal Register / Vol. 72, No. 105 / Friday, June 1, 2007 / Proposed Rules                                           30501

                                            ADDRESSES   section for the address and                 Aviation Administration proposes to                     Accounts (HSAs) under section 4980G
                                            phone number) between 9 a.m. and 5                      amend 14 CFR part 71 as follows:                        in instances where an employee has not
                                            p.m., Monday through Friday, except                                                                             established an HSA by December 31st
                                            federal holidays. An informal docket                    PART 71—DESIGNATION OF CLASS A,                         and in instances where an employer
                                            may also be examined during normal                      B, C, D, AND E AIRSPACE AREAS; AIR                      accelerates contributions for the
                                            business hours at the Northwest                         TRAFFIC SERVICE ROUTES; AND                             calendar year for employees who have
                                            Mountain Regional Office of the Federal                 REPORTING POINTS                                        incurred qualified medical expenses. In
                                            Aviation Administration, Air Traffic                      1. The authority citation for 14 CFR                  general, these proposed regulations
                                            Organization, Western Service Area,                     part 71 continues to read as follows:                   affect employers that contribute to
                                            System Support Group, 1601 Lind                                                                                 employees’ HSAs. This document also
                                            Avenue, SW., Renton, WA 98057.                            Authority: 49 U.S.C. 106(g), 40103, 40113,            provides notice of a public hearing on
                                                                                                    40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–             these proposed regulations.
                                              Persons interested in being placed on                 1963 Comp., p. 389.
                                            a mailing list for future NPRM’s should                                                                         DATES: Written or electronic comments
                                            contact the FAA’s Office of Rulemaking,                 § 71.1       [Amended]                                  must be received by August 30, 2007.
                                            (202) 267–9677, for a copy of Advisory                     2. The incorporation by reference in                 Outlines of topics to be discussed at the
                                            Circular No. 11–2A, Notice of Proposed                  14 CFR 71.1 of the FAA Order 7400.9P,                   public hearing scheduled for September
                                            Rulemaking Distribution System, which                   Airspace Designations and Reporting                     28, 2007, at 10 a.m., must be received
                                            describes the application procedure.                    Points, dated September 1, 2006, and                    by August 28, 2007.
                                            The Proposal                                            effective September 15, 2006 is                         ADDRESSES: Send submissions to:
                                                                                                    amended as follows:                                     CC:PA:LPD:PR (REG–143797–06),
                                               The FAA is proposing an amendment
                                                                                                                                                            Internal Revenue Service, POB 7604,
                                            to Title 14 Code of Federal Regulations                 Paragraph 6002. Class E Airspace Areas
                                                                                                    Designated as a Surface Area.
                                                                                                                                                            Ben Franklin Station, Washington, DC
                                            (14 CFR) part 71 by establishing Class E
                                                                                                                                                            20044. Submissions may be hand
                                            airspace at Everett, WA. Class E surface                *        *      *      *       *                        delivered to CC:PA:LPD:PR (REG–
                                            airspace is required to accommodate
                                                                                                    ANM WA, E2 Everett, WA [New]                            143797–06), Courier’s Desk, Internal
                                            aircraft executing SVFR operations at
                                                                                                    Everett, Snohomish County Airport (Paine                Revenue Service, 1111 Constitution
                                            Everett, Snohomish County Airport
                                                                                                         Field), WA                                         Avenue, NW., Washington, DC.
                                            (Paine Field), Everett, WA.
                                                                                                       (Lat. 47°54′27″ N., long. 122°16′53″ W.)             Alternatively, taxpayers may submit
                                               Class E airspace designations are                                                                            comments electronically via the Federal
                                                                                                       That airspace extending upward from the
                                            published in paragraph 6002 of FAA                      surface to and including 3,100 feet MSL                 eRulemaking Portal at
                                            Order 7400.9P, dated September 1,                       within a 4.5-mile radius of the Snohomish               www.regulations.gov (IRS REG–143797–
                                            2006, and effective September 15, 2006,                 County Airport. This Class E airspace is                06). The public hearing will be held in
                                            which is incorporated by reference in 14                effective when the tower is not in operation.           the IRS Auditorium, Internal Revenue
                                            CFR 71.1. The Class E airspace                          The effective date and time will be                     Service, 1111 Constitution Avenue,
                                            designation listed in this document will                continuously published in the Airport/
                                                                                                                                                            NW., Washington, DC.
                                            be published subsequently in this                       Facility Directory.
                                            Order.                                                  *        *      *      *       *                        FOR FURTHER INFORMATION CONTACT:
                                               The FAA has determined that this                                                                             Concerning the proposed regulations,
                                                                                                      Issued in Seattle, Washington, on May 7,              Mireille Khoury at (202) 622–6080;
                                            proposed regulation only involves an                    2007.
                                            established body of technical                                                                                   concerning submissions of comments,
                                                                                                    Clark Desing,                                           the hearing, and/or to be placed on the
                                            regulations for which frequent and                      Manager, System Support Group, Western
                                            routine amendments are necessary to                                                                             building access list to attend the
                                                                                                    Service Area.                                           hearing, Kelly Banks at (202) 622–7180
                                            keep them operationally current.                        [FR Doc. E7–10565 Filed 5–31–07; 8:45 am]
                                            Therefore, this proposed regulation; (1)                                                                        (not toll-free numbers).
                                                                                                    BILLING CODE 4910–13–P
                                            Is not a ‘‘significant regulatory action’’                                                                      SUPPLEMENTARY INFORMATION:
                                            under Executive Order 12866; (2) is not                                                                         Paperwork Reduction Act
                                            a ‘‘significant rule’’ under DOT
                                            Regulatory Policies and Procedures (44                  DEPARTMENT OF THE TREASURY                                The collections of information
                                            FR 11034; February 26, 1979); and (3)                                                                           contained in this notice of proposed
                                                                                                    Internal Revenue Service                                rulemaking have been submitted to the
                                            does not warrant preparation of a
                                            regulatory evaluation as the anticipated                                                                        Office of Management and Budget for
                                                                                                    26 CFR Part 54                                          review in accordance with the
                                            impact is so minimal. Since this is a
                                            routine matter that will only affect air                [REG–143797–06]                                         Paperwork Reduction Act of 1995 (44
                                            traffic procedures and air navigation, it                                                                       U.S.C. 3507(d)). Comments on the
                                            is certified that this proposed rule,                   RIN 1545–BF97                                           collections of information should be
                                            when promulgated, would not have a                                                                              sent to the Office of Management and
                                                                                                    Employer Comparable Contributions to                    Budget, Attn: Desk Officer for the
                                            significant economic impact on a                        Health Savings Accounts Under
                                            substantial number of small entities                                                                            Department of the Treasury, Office of
                                                                                                    Section 4980G                                           Information and Regulatory Affairs,
                                            under the criteria of the Regulatory
                                            Flexibility Act.                                        AGENCY: Internal Revenue Service (IRS),                 Washington, DC 20503, with copies to
                                                                                                    Treasury.                                               the Internal Revenue Service, Attn: IRS
                                            List of Subjects in 14 CFR Part 71                                                                              Reports Clearance Officer,
                                                                                                    ACTION: Notice of proposed rulemaking
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                                             Airspace, Incorporation by reference,                  and notice of public hearing.                           SE:W:CAR:MP:T:T:S Washington, DC
                                            Navigation (air).                                                                                               20224. Comments on the collection of
                                                                                                    SUMMARY: This document contains                         information should be received by July
                                            The Proposed Amendment                                                                                          31, 2007.
                                                                                                    proposed regulations providing
                                              Accordingly, pursuant to the                          guidance on employer comparable                           Comments are specifically requested
                                            authority delegated to me, the Federal                  contributions to Health Savings                         concerning:


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                                            30502                      Federal Register / Vol. 72, No. 105 / Friday, June 1, 2007 / Proposed Rules

                                              Whether the proposed collections of                   also added to the Code by the Act.                    established an HSA but not notified the
                                            information are necessary for the proper                Section 4980G(a) imposes an excise tax                employer of that fact. The proposed
                                            performance of the functions of the IRS,                on the failure of an employer to make                 regulations provide that, in order to
                                            including whether the information will                  comparable contributions to the HSAs                  comply with the comparability rules for
                                            have practical utility;                                 of its employees for a calendar year.                 a calendar year with respect to such
                                              The accuracy of the estimated burden                  Section 4980G(b) provides that rules                  employees, the employer must comply
                                            associated with the proposed collection                 and requirements similar to section                   with a notice requirement and a
                                            of information; How the quality, utility,               4980E (the comparability rules for                    contribution requirement. In order to
                                            and clarity of the information to be                    Archer Medical Savings Accounts                       comply with the notice requirement, the
                                            collected may be enhanced;                              (Archer MSAs)) apply for purposes of                  employer must provide all such
                                              How the burden of complying with                      section 4980G. Section 4980E(b)                       employees, by January 15 of the
                                            the proposed collection of information                  imposes an excise tax equal to 35% of                 following calendar year, written notice
                                            may be minimized, including through                     the aggregate amount contributed by the               that each eligible employee who, by the
                                            the application of automated collection                 employer to the Archer MSAs of                        last day of February, both establishes an
                                            techniques or other forms of information                employees during the calendar year if                 HSA and notifies the employer that he
                                            technology; and                                         an employer fails to make comparable
                                              Estimates of capital or start-up costs                                                                      or she has established the HSA will
                                                                                                    contributions to the Archer MSAs of its
                                            and costs of operation, maintenance,                                                                          receive a comparable contribution to the
                                                                                                    employees in a calendar year.
                                            and purchase of services to provide                                                                           HSA. For each such eligible employee
                                                                                                    Accordingly, if an employer fails to
                                            information.                                                                                                  who establishes an HSA and so notifies
                                                                                                    make comparable contributions to the
                                              The collection of information in these                HSAs of its employees during a calendar               the employer by the end of February,
                                            proposed regulations is in Q & A–14.                    year, an excise tax equal to 35% of the               the employer must contribute to the
                                            This information is needed for purposes                 aggregate amount contributed by the                   HSA by April 15 comparable amounts
                                            of making HSA contributions to                          employer to the HSAs of its employees                 (taking into account each month that the
                                            employees who establish an HSA after                    during that calendar year is imposed on               employee was a comparable
                                            the end of the calendar year but before                 the employer. See sections 4980G(a) and               participating employee) plus reasonable
                                            the last day of February. The likely                    (b) and 4980E(b). See also Notice 2004–               interest. The notice may be delivered
                                            respondents are employers that                          2 (2004–2 CB 269), Q & A–32. See                      electronically. The proposed regulations
                                            contribute to employees’ HSAs.                          § 601.601(d)(2).                                      provide sample language that employers
                                              Estimated total annual reporting                         On August 26, 2005, proposed                       may use as a basis in preparing their
                                            burden: 1,250,000 hours.                                regulations (REG–138647–04) on the                    own notices.
                                              The estimated annual burden per                       comparability rules of section 4980G
                                            respondent is: .25 hour.                                                                                      Acceleration of Employer Contributions
                                                                                                    were published in the Federal Register
                                              Estimated number of respondents:                      (70 FR 50233). On July 31, 2006, final
                                            5,000,000.                                                                                                       The proposed regulations also address
                                                                                                    regulations (REG–138647–04) on the                    a second issue relating to acceleration of
                                              The estimated annual frequency of                     comparability rules were published in
                                            responses: 1.                                                                                                 contributions. They provide that, for
                                                                                                    the Federal Register (71 FR 43056). The               any calendar year, an employer may
                                              An agency may not conduct or
                                                                                                    final regulations clarified and expanded              accelerate part or all of its contributions
                                            sponsor, and a person is not required to
                                                                                                    upon the guidance regarding the                       for the entire year to the HSAs of
                                            respond to, a collection of information
                                                                                                    comparability rules published in Notice               employees who have incurred during
                                            unless it displays a valid control
                                                                                                    2004–2 and in Notice 2004–50 (2004–33                 the calendar year qualified medical
                                            number assigned by the Office of
                                                                                                    IRB 196), Q & A–46 through Q & A–54.
                                            Management and Budget.                                                                                        expenses exceeding the employer’s
                                                                                                    See § 601.601(d)(2). Q & A–6(b) of the
                                              Books or records relating to a                                                                              cumulative HSA contributions at that
                                                                                                    final regulations reserved the issue
                                            collection of information must be                                                                             time. If an employer accelerates
                                                                                                    dealing with an employee who has not
                                            retained as long as their contents may                                                                        contributions for this reason, these
                                                                                                    established an HSA by the end of the
                                            become material in the administration                                                                         contributions must be available on an
                                                                                                    calendar year. These proposed
                                            of any internal revenue law. Generally,                                                                       equal and uniform basis to all eligible
                                                                                                    regulations address that reserved issue
                                            tax returns and tax return information                                                                        employees throughout the calendar year
                                                                                                    and one additional issue concerning the
                                            are confidential, as required by 26                                                                           and employers must establish
                                                                                                    acceleration of employer contributions.
                                            U.S.C. 6103.                                                                                                  reasonable uniform methods and
                                                                                                       Section 4980G was amended by
                                            Background                                              section 306 of the Tax Relief and Health              requirements for acceleration of
                                                                                                    Care Act of 2006, Public Law 109–432                  contributions and the determination of
                                               This document contains proposed                                                                            medical expenses. An employer is not
                                            Pension Excise Tax Regulations (26 CFR                  (120 Stat. 2922), effective for taxable
                                                                                                    years beginning after December 31,                    required to contribute reasonable
                                            part 54) under section 4980G of the
                                                                                                    2006. The Treasury Department and IRS                 interest on either accelerated or non-
                                            Internal Revenue Code (Code). Under
                                                                                                    expect to publish guidance on the                     accelerated HSA contributions. But see
                                            section 4980G, an excise tax is imposed
                                                                                                    amendment to section 4980G.                           Q & A–6 and Q & A–12 in § 54.4980G–
                                            on an employer that fails to make
                                                                                                                                                          4 for when reasonable interest must be
                                            comparable contributions to the HSAs                    Explanation of Provisions                             paid.
                                            of its employees.
                                               Section 1201 of the Medicare                         Employee Has Not Established HSA by
                                                                                                                                                          Other Issues
                                            Prescription Drug, Improvement, and                     December 31
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                                            Modernization Act of 2003 (Act), Public                   The proposed regulations provide a                    These proposed regulations concern
                                            Law 108–173, (117 Stat. 2066, 2003)                     means for employers to comply with the                only section 4980G. Other statutes may
                                            added section 223 to the Code to permit                 comparability requirements with respect               impose additional requirements (for
                                            eligible individuals to establish HSAs                  to employees who have not established                 example, the Health Insurance
                                            for taxable years beginning after                       an HSA by December 31, as well as with                Portability and Accountability Act of
                                            December 31, 2003. Section 4980G was                    respect to employees who may have                     1996 (HIPAA) (sections 9801–9803)).


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                                                                       Federal Register / Vol. 72, No. 105 / Friday, June 1, 2007 / Proposed Rules                                               30503

                                            Proposed Effective Date                                 be available for public inspection and                § 54.4980g–0      Table of contents.
                                                                                                    copying.                                              *        *   *       *     *
                                               It is proposed that these regulations
                                                                                                       A public hearing has been scheduled
                                            apply to employer contributions made                                                                          § 54.4980g–4 Calculating comparable
                                                                                                    for September 27, 2007, beginning at 10               contributions.
                                            on or after the date the final regulations
                                                                                                    a.m. in the Auditorium, Internal
                                            are published in the Federal Register.                                                                        *        *   *       *     *
                                                                                                    Revenue Service, 1111 Constitution                      Q–14: How does an employer comply with
                                            However, taxpayers may rely on these
                                                                                                    Avenue, NW., Washington, DC. Due to                   the comparability rules if an employee has
                                            regulations for guidance pending the
                                                                                                    building security procedures, visitors                not established an HSA by December 31st?
                                            issuance of final regulations.
                                                                                                    must enter at the Constitution Avenue                   Q–15: For any calendar year, may an
                                            Alternatively, until the publication of
                                                                                                    entrance. In addition, all visitors must              employer accelerate part or all of its
                                            final regulations, an employer may                                                                            contributions for the entire year to the HSAs
                                                                                                    present photo identification to enter the
                                            continue to rely on the last sentence of                                                                      of employees who have incurred, during the
                                                                                                    building. Because of access restrictions,
                                            Q&A 6(a) of § 54.4980G–4 of the                                                                               calendar year, qualified medical expenses (as
                                                                                                    visitors will not be admitted beyond the
                                            proposed regulations published in the                                                                         defined in section 223(d)(2)) exceeding the
                                                                                                    immediate entrance area more than 30                  employer’s cumulative HSA contributions at
                                            Federal Register on August 26, 2005,
                                                                                                    minutes before the hearing starts. For                that time?
                                            which provides that, an employer is not
                                                                                                    information about having your name                      Q–16: What is the effective date for the
                                            required to make comparable
                                                                                                    placed on the building access list to                 rules in Q & A–14 and 15 of this section?
                                            contributions for a calendar year to an
                                                                                                    attend the hearing, see the FOR FURTHER                 Par. 3. Section 54.4980g–4 is
                                            employee’s HSA if the employee has not
                                                                                                    INFORMATION CONTACT section of this                   amended by:
                                            established an HSA by December 31st of
                                                                                                    preamble.                                               1. Removing paragraph (b) and
                                            the calendar year.
                                                                                                       The rules of 26 CFR 601.601(a)(3)                  redesignating paragraph (c) as paragraph
                                            Special Analyses                                        apply to the hearing. Persons who wish                (b) in Q & A–6.
                                                                                                    to present oral comments at the hearing                 2. Adding Q & A–14, Q & A–15 and
                                               It has been determined that this notice              must submit written or electronic                     Q & A–16.
                                            of proposed rulemaking is not a                         comments by August 30, 2007 and an                      The additions read as follows:
                                            significant regulatory action as defined                outline of the topics to be discussed and
                                            in Executive Order 12866. Therefore, a                                                                        § 54.4980G–4 Calculating comparable
                                                                                                    the amount of time to be devoted to                   contributions.
                                            regulatory assessment is not required. It               each topic (a signed original and eight
                                            also has been determined that section                                                                         *     *     *      *     *
                                                                                                    (8) copies) August 28, 2007. A period of                Q–14: Does an employer fail to satisfy
                                            553(b) of the Administrative Procedure                  10 minutes will be allotted to each
                                            Act (5 U.S.C. chapter 5) does not apply                                                                       the comparability rules for a calendar
                                                                                                    person for making comments. An                        year if the employer fails to make
                                            to these regulations. It is hereby                      agenda showing the scheduling of the
                                            certified that the collection of                                                                              contributions with respect to eligible
                                                                                                    speakers will be prepared after the                   employees because the employee has
                                            information in these regulations will not               deadline for receiving outlines has
                                            have a significant economic impact on                                                                         not established an HSA or because the
                                                                                                    passed. Copies of the agenda will be                  employer does not know that the
                                            a substantial number of small entities.                 available free of charge at the hearing.
                                            This certification is based on the fact the                                                                   employee has established an HSA?
                                            estimated burden associated with the                    Drafting Information                                    A–14: (a) In general. An employer
                                            information collection averages 15                                                                            will not fail to satisfy the comparability
                                                                                                      The principal author of these                       rules for a calendar year merely because
                                            minutes per respondent. Moreover, a
                                                                                                    proposed regulations is Mireille Khoury,              the employer fails to make contributions
                                            model notice has been provided for
                                                                                                    Office of Division Counsel/Associate                  with respect to an eligible employee
                                            employers who are subject to this
                                                                                                    Chief Counsel (Tax Exempt and                         because the employee has not
                                            collection of information any burden
                                                                                                    Government Entities), Internal Revenue                established an HSA or because the
                                            imposed on employees due to the
                                                                                                    Service. However, personnel from other                employer does not know that the
                                            collection of information in these
                                                                                                    offices of the IRS and Treasury                       employee has established an HSA, if—
                                            regulations will be outweighed by the
                                                                                                    Department participated in their                        (1) The employer provides timely
                                            benefit of receiving HSA contributions.
                                                                                                    development.                                          written notice to all such eligible
                                            Therefore, a Regulatory Flexibility
                                                                                                                                                          employees that it will make comparable
                                            Analysis under the Regulatory                           List of Subjects in 26 CFR Part 54                    contributions for eligible employees
                                            Flexibility Act (5 U.S.C. Chapter 6) is
                                                                                                      Excise taxes, Pensions, Reporting and               who, by the last day of February of the
                                            not required. Pursuant to section 7805(f)
                                                                                                    recordkeeping requirements.                           following calendar year, both establish
                                            of the Internal Revenue Code, this
                                                                                                                                                          an HSA and notify the employer (in
                                            regulation will be submitted to the Chief               Proposed Amendment to the                             accordance with a procedure specified
                                            Counsel for Advocacy of the Small                       Regulations                                           in the notice) that they have established
                                            Business Administration for comment                                                                           an HSA; and
                                            on its impact on small business.                          Accordingly, 26 CFR part 54 is
                                                                                                    proposed to be amended as follows:                      (2) For each such eligible employee
                                            Comments and Public Hearing                                                                                   who establishes an HSA and so notifies
                                                                                                    PART 54—PENSION EXCISE TAXES                          the employer on or before the last day
                                              Before these proposed regulations are                                                                       of February of such following calendar
                                            adopted as final regulations,                             Paragraph 1. The authority citation                 year, the employer contributes to the
                                            consideration will be given to any                      for part 54 continues to read in part as              HSA comparable amounts (taking into
                                            written comments (a signed original and                 follows:                                              account each month that the employee
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                                            eight (8) copies) or electronic comments                  Authority: 26 U.S.C. 7805 * * *                     was a comparable participating
                                            that are submitted timely to the IRS. The                                                                     employee) plus reasonable interest by
                                            IRS and Treasury Department request                       Par. 2. Section 54.4980g–0 is                       April 15th of such following calendar
                                            comments on the clarity of the proposed                 amended by adding entries under                       year.
                                            regulations and how they can be made                    § 54.4980g–4 for Q–14, Q–15 and Q–16                    (b) Notice. The notice described in
                                            easier to understand. All comments will                 to read as follows:                                   paragraph (a) of this Q & A–14 must be


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                                            30504                      Federal Register / Vol. 72, No. 105 / Friday, June 1, 2007 / Proposed Rules

                                            provided to each eligible employee who                     (e) Electronic delivery. An employer               reasonable interest to the HSAs of the eligible
                                            has not established an HSA by                           may furnish the notice required under                 employees that establish HSAs and provide
                                            December 31 or if the employer does not                 this section electronically. See                      the necessary information after the end of the
                                                                                                                                                          year but on or before the last day of February,
                                            know if the employee established an                     § 1.401(a)–21 of this chapter.                        2010. Employer T makes no contribution to
                                            HSA. The employer may provide the                          (f) Examples. The following examples               the HSAs of employees that do not establish
                                            notice to other employees as well.                      illustrate the rules in this Q & A–14:                an HSA and provide the necessary
                                            However, if the employee has earlier                       Example 1. In a calendar year, Employer Q          information on or before the last day of
                                            notified the employer that he or she has                contributes to the HSAs of current employees          February, 2008. Employer T satisfies the
                                            established an HSA, or if the employer                  who are eligible individuals covered under            comparability requirements.
                                            has previously made contributions to                    any HDHP. For the 2009 calendar year,                    Example 5. For 2007, Employer V
                                            that employee’s HSA, the employer may                   Employer Q contributes $50 per month on               contributes to the HSAs of current full time
                                                                                                    the first day of each month, beginning                employees with family coverage under any
                                            not condition making comparable
                                                                                                    January 1st, to the HSA of each employee              HDHP. Employer V has 500 current full time
                                            contributions on receipt of any                                                                               employees. As of the date for Employer V’s
                                                                                                    who is an eligible employee on that date. For
                                            additional notice from that employee.                                                                         first HSA contribution for the 2007 calendar
                                                                                                    the 2009 calendar year, Employer Q provides
                                            For each calendar year, a notice is                     written notice satisfying the content                 year, 450 employees have established HSAs.
                                            deemed to be timely if the employer                     requirements on October 16, 2008 to all               Employer V provides timely written notice
                                            provides the notice no earlier than 90                  employees regarding the availability of HSA           satisfying the content requirements only to
                                            days before the first HSA employer                      contributions for eligible employees. For             those 50 current full time employees who
                                            contribution for that calendar year and                 eligible employees who are hired after                have not established HSAs. Employer V
                                                                                                    October 16, 2008, Employer Q provides such            makes identical quarterly contributions to the
                                            no later than January 15 of the following                                                                     450 employees who established HSAs.
                                            calendar year.                                          a notice no later than January 15, 2010.
                                                                                                    Employer Q’s notice satisfies the notice              Employer V contributes comparable amounts
                                              (c) Model notice. Employers may use                                                                         to the eligible employees who establish HSAs
                                                                                                    requirements in paragraph (a)(1) of this Q &
                                            the following sample language as a basis                A–14.                                                 and provide the necessary information after
                                            in preparing their own notices.                            Example 2. Employer R’s written cafeteria          the end of the year but on or before the last
                                                                                                    plan permits employees to elect to make pre-          day of February, 2008. Employer V makes no
                                               Notice to Employees Regarding Employer
                                                                                                    tax salary reduction contributions to their           contribution to the HSAs of employees that
                                            Contributions to HSAs:
                                                                                                    HSAs. Employees making this election have             do not establish an HSA and provide the
                                               This notice explains how you may be
                                                                                                    the right to receive cash or other taxable            necessary information on or before the last
                                            eligible to receive contributions from
                                                                                                                                                          day of February, 2008. Employer V satisfies
                                            [employer] if you are covered by a High                 benefits in lieu of their HSA pre-tax
                                                                                                                                                          the comparability rules.
                                            Deductible Health Plan (HDHP). [Employer]               contribution. Employer R automatically
                                            provides contributions to the Health Savings            contributes a non-elective matching                      Q–15: For any calendar year, may an
                                            Account (HSA) of each employee who is                   contribution to the HSA of each employee              employer accelerate part or all of its
                                            [insert employer’s eligibility requirements for         who makes a pre-tax HSA contribution.                 contributions for the entire year to the
                                            HSA contributions] (‘‘eligible employee’’). If          Because Employer R’s HSA contributions are            HSAs of employees who have incurred,
                                            you are an eligible employee, you must do               made through the cafeteria plan, the
                                            the following in order to receive an employer
                                                                                                                                                          during the calendar year, qualified
                                                                                                    comparability requirements do not apply to
                                            contribution:                                           the HSA contributions made by Employer R.
                                                                                                                                                          medical expenses (as defined in section
                                               (1) Establish an HSA on or before the last           Consequently, Employer R is not required to           223(d)(2)) exceeding the employer’s
                                            day in February of [insert year after the year          provide written notice to its employees               cumulative HSA contributions at that
                                            for which the contribution is being made]               regarding the availability of this matching           time?
                                            and;                                                    HSA contribution. See Q & A–1 in                         A–15: (a) In general. Yes. For any
                                               (2) Notify [insert name and contact                  § 54.4980G–5 for treatment of HSA                     calendar year, an employer may
                                            information for appropriate person to be                contributions made through a cafeteria plan.          accelerate part or all of its contributions
                                            contacted] of your HSA account information                 Example 3. In a calendar year, Employer S
                                            on or before the last day in February of
                                                                                                                                                          for the entire year to the HSAs of
                                                                                                    maintains an HDHP and only contributes to             employees who have incurred, during
                                            [insert year after year for which the                   the HSAs of eligible employees who elect
                                            contribution is being made]. [Specify the                                                                     the calendar year, qualified medical
                                                                                                    coverage under its HDHP. For the 2009
                                            HSA account information that the employee               calendar year, Employer S employs ten
                                                                                                                                                          expenses exceeding the employer’s
                                            must provide (e.g., account number, name                eligible employees. For the 2009 calendar             cumulative HSA contributions at that
                                            and address of trustee or custodian, etc.) and                                                                time. If an employer accelerates
                                                                                                    year, all ten employees have elected coverage
                                            the method by which the employee must                                                                         contributions to employees’ HSAs, all
                                                                                                    under Employer S’s HDHP and have
                                            provide this account information (e.g., in
                                            writing, on a certain form, etc.)].
                                                                                                    established HSAs. For the 2009 calendar               accelerated contributions must be
                                                                                                    year, Employer S makes comparable                     available throughout the calendar year
                                               If you establish your HSA on or before the
                                            last day of February in [insert year after year         contributions to the HSAs of all ten                  on an equal and uniform basis to all
                                            for which the contribution is being made]               employees. Employer S satisfies the                   eligible employees. Employers must
                                            and notify [employer] of your HSA account               comparability rules. Thus, Employer S is not          establish reasonable uniform methods
                                            information, you will receive your HSA                  required to provide written notice to its
                                                                                                    employees regarding the availability of HSA
                                                                                                                                                          and requirements for accelerated
                                            contributions, plus reasonable interest, for                                                                  contributions and the determination of
                                            [insert year for which contribution is being            contributions for eligible employees.
                                                                                                       Example 4. In a calendar year, Employer T          medical expenses.
                                            made] by April 15 of [insert year after year
                                            for which contribution is being made]. If,              contributes to the HSAs of current full-time             (b) Satisfying comparability. An
                                            however, you do not establish your HSA or               employees with family coverage under any              employer that accelerates contributions
                                            you do not notify us of your HSA account                HDHP. For the 2009 calendar year, Employer            to the HSAs of its employees will not
                                            information by the deadline, then we are not            T provides timely written notice satisfying           fail to satisfy the comparability rules
                                            required to make any contributions to your              the content requirements to all employees             because employees who incur
                                            HSA for [insert applicable year]. You may               regardless of HDHP coverage. Employer T               qualifying medical expenses exceeding
                                                                                                    makes identical monthly contributions to all
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                                            notify us that you have established an HSA                                                                    the employer’s cumulative HSA
                                            by sending an [e-mail or] a written notice to           eligible employees (meaning full time
                                                                                                    employees with family HDHP coverage) that
                                                                                                                                                          contributions at that time have received
                                            [insert name, title and, if applicable, e-mail
                                            address]. If you have any questions about this          establish HSAs. Employer T contributes                more contributions in a given period
                                            notice, you can contact [insert name and                comparable amounts (taking into account               than comparable employees who do not
                                            title] at [insert telephone number or other             each month that the employee was a                    incur such expenses, provided that all
                                            contact information].                                   comparable participating employee) plus               comparable employees receive the same


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                                                                       Federal Register / Vol. 72, No. 105 / Friday, June 1, 2007 / Proposed Rules                                           30505

                                            amount or the same percentage for the                   specific information regarding VA’s                   amend regulations concerning the
                                            calendar year. Also, an employer that                   proposal to phase-in implementation of                servicing and claims submission
                                            accelerates contributions to the HSAs of                the new electronic reporting                          requirements on VA-guaranteed home
                                            its employees will not fail to satisfy the              requirement and other provisions in the               loans. The extensive changes in the
                                            comparability rules because an                          proposed rule published February 18,                  proposed rule package were the result of
                                            employee who terminates employment                      2005 (70 FR 8472). In addition, VA is                 an in-depth business process
                                            prior to the end of the calendar year has               taking this opportunity to address                    reengineering project that consulted
                                            received more contributions on a                        certain comments raised by some                       mortgage-industry and government
                                            monthly basis than employees who                        members of industry in response to                    experts to help develop a plan to ensure
                                            work the entire calendar year. An                       VA’s publication of the first                         that the VA home loan program
                                            employer is not required to contribute                  supplemental notice to this rulemaking                continued to provide the best possible
                                            reasonable interest on either accelerated               (November 27, 2006 (71 FR 68948)), and                service to veterans of our armed forces
                                            or non-accelerated HSA contributions.                   to provide further explanation of the                 in recognition of their service to our
                                            But see Q & A–6 and Q & A–12 of this                    ongoing development of VA’s computer-                 country.
                                            section for when reasonable interest                    based tracking system. VA is reopening                   Included in the proposed rule were
                                            must be paid.                                           the comment period for the limited                    requirements for reporting information
                                               Q–16: What is the effective date for                 purpose of accepting public comments                  to VA under a new 38 CFR 36.4315a.
                                            the rules in Q & A–14 and 15 of this                    concerning the supplemental                           Under the Revised Reporting
                                            section?                                                information provided in this notice.                  Requirements preamble heading, 70 FR
                                               A–16: It is proposed that these                      DATES: Comments must be received on                   8474–8475, VA stated that proposed
                                            regulations apply to employer                           or before June 15, 2007. All comments                 § 36.4315a would require all loan
                                            contributions made on or after the date                 previously received following                         holders to electronically report
                                            the final regulations are published in                  publication of the proposed rule and the              information to the Department by use of
                                            the Federal Register. However,                          supplemental notice referenced above                  a computer system, and that VA would
                                            taxpayers may rely on these regulations                 are being considered and do not need to               be providing more specific information
                                            for guidance pending the issuance of                    be resubmitted.                                       on this system prior to implementation.
                                            final regulations. Alternatively, until the             ADDRESSES: Written comments may be                    As VA progressed in developing its
                                            publication of final regulations, an                    submitted through www.regulations.gov;                tracking system necessary to receive
                                            employer may continue to rely on the                    by mail or hand-delivery to the Director,             reports from loan servicers, it more
                                            last sentence of Q&A 6(a) of section                    Regulations Management (00REG),                       clearly defined the system events and
                                            54.4980G–4 of the proposed regulations                  Department of Veterans Affairs, 810                   data elements that would be reported
                                            published in the Federal Register on                    Vermont Ave., NW., Room 1068,                         under § 36.4315a. VA published more
                                            August 26, 2005, which provides that,                   Washington, DC 20420; or by fax to                    detailed information on those data
                                            an employer is not required to make                     (202) 273–9026. Comments should                       elements and events in a supplemental
                                            comparable contributions for a calendar                 indicate that they are submitted in                   notice dated November 27, 2006 (71 FR
                                            year to an employee’s HSA if the                        response to ’’RIN 2900–AL65.’’ Copies                 68948). Public comments in response to
                                            employee has not established an HSA                     of comments received will be available                that notice and the original proposed
                                            by December 31st of the calendar year.                  for public inspection in the Office of                rules expressed concern that providing
                                                                                                    Regulation Policy and Management,                     the amount of data requested by VA
                                            Kevin M. Brown,
                                                                                                    Room 1063B, between the hours of 8                    (and the corresponding need to adapt
                                            Deputy Commissioner for Services and
                                                                                                    a.m. and 4:30 p.m., Monday through                    industry servicing systems to provide
                                            Enforcement.
                                                                                                    Friday (except holidays). Please call                 this data) would be extensive and time-
                                            [FR Doc. E7–10529 Filed 5–31–07; 8:45 am]
                                                                                                    (202) 273–9515 for an appointment. In                 consuming. The comments also
                                            BILLING CODE 4830–01–P
                                                                                                    addition, during the comment period,                  expressed a desire for careful testing of
                                                                                                    comments may be viewed online                         all aspects of the new electronic
                                                                                                    through the Federal Document                          reporting requirements. In response to
                                            DEPARTMENT OF VETERANS                                  Management System (FDMS).                             these comments, VA proposes a phased
                                            AFFAIRS                                                 Comments previously received                          implementation by industry segment
                                                                                                    regarding the notice of proposed                      and submits the following for public
                                            38 CFR Part 36                                          rulemaking for RIN 2900-AL65,                         comment.
                                            RIN 2900–AL65                                           published February 18, 2005 (70 FR                       The purpose of this notice is to solicit
                                                                                                    8472), and the supplemental notice                    views, suggestions and comments from
                                            Loan Guaranty: Loan Servicing and                       published November 27, 2006 (71 FR                    program participants, as well as the
                                            Claims Procedures Modifications                         68948), will still be considered in the               general public, as to what extent VA’s
                                            AGENCY: Department of Veterans Affairs.                 rulemaking process and do not need to                 proposed phased implementation
                                                                                                    be resubmitted.                                       should be adopted or modified, or other
                                            ACTION:Second supplemental notice of
                                                                                                    FOR FURTHER INFORMATION CONTACT:                      action taken, and to ensure that
                                            proposed rulemaking; reopening of
                                            comment period.                                         Mike Frueh, Assistant Director for Loan               participants, beneficiaries, and the
                                                                                                    Management (261), Veterans Benefits                   general public have the information
                                            SUMMARY: This document provides a                       Administration, Department of Veterans                they need to provide informed
                                            second supplemental notice regarding a                  Affairs, 810 Vermont Avenue, NW.,                     comments. To facilitate consideration of
                                            proposal to amend the Department of                     Washington, DC 20420, at 202–273–                     the issues covered by this supplemental
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                                            Veterans Affairs (VA) Loan Guaranty                     7325. (This is not a toll-free telephone              notice, VA has set forth below a few
                                            regulations related to several aspects of               number.)                                              matters with respect to which views,
                                            the servicing and liquidating of                        SUPPLEMENTARY INFORMATION: VA                         suggestions, comments and information
                                            guaranteed housing loans in default,                    published a notice of proposed                        are requested. Interested persons,
                                            and submission of guaranty claims by                    rulemaking in the Federal Register on                 however, are encouraged to address any
                                            loan holders. This notice provides                      February 18, 2005 (70 FR 8472), to                    other matters they believe to be germane


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