HSA and health insurance

2 equal shareholders S-Corp (H-W). Pays 100% of shareholder health insurance which is included on the W-2, and pays 50% of employee health insurance. I believe this is ok because of different classes of employees.

Now wants to add an HSA. The two shareholders want to contribute to HSA at max – and add to W-2. They also want any employees who want to contribute to HSA to defer from payroll. Can we have company pay for 100% for shareholders (added to W-2) and only offer deferral to employees?

I believe need a cafeteria plan to set up HSA. They think maybe only one employee may take them up on this HSA option . Wouldn’t it be easier to just have the two shareholders contribute to the HSA’s outside of the corporation? I think they only thing they will be missing will be the savings on the FICA/Medicare since they aren’t maxed out yet. Any way to do this through the corp without the 125 plan set-up? I don’t think there is, but thought I would ask.

Or maybe, keep as is for 2018, and have them set up a plan for 2019. Is my thought process ok?

https://www.irs.gov/government-entities/federal-state-local-governments/faqs-for-government-entities-regarding-cafeteria-plans

Must be an HSA-qualified plan before you can have an HSA acct. Can't just add it with any old plan.

Yes. You will need the 125 plan document in place in order to take insurance and HSA out of employee's paycheck pre-tax. Those doc's are boilerplate. You can get 'er done this year.

The SH's insurance and the HSA will be added to their taxable wages. Not subject to FICA.

You need the policy to be in force on 12/1 to contribute the annual maximum to the HSA. Otherwise, prorate (i.e. 1/12th).

This is going to be a 2019 start date.

Pre-tax insurance premiums can be obtained with a premium only plan (POP)