---
kind: "section"
citation: "26 U.S.C. § 4980E"
title: "26"
title_heading: "Internal Revenue Code"
number: "4980E"
heading: "Failure of employer to make comparable Archer MSA contributions"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/4980E"
units:
  - "Subtitle D — Miscellaneous Excise Taxes"
  - "Chapter 43 — Qualified Pension, Etc., Plans"
---

# §4980E. Failure of employer to make comparable Archer MSA contributions

- (a) **General rule—** In the case of an employer who makes a contribution to the Archer MSA of any [employee](/usc/26/101.md?p=i-3) with respect to coverage under a high deductible health plan of the employer during a calendar year, there is hereby imposed a tax on the failure of such employer to meet the requirements of [subsection (d)](#d) for such calendar year.
- (b) **Amount of tax—** The amount of the tax imposed by [subsection (a)](#a) on any failure for any calendar year is the amount equal to 35 percent of the aggregate amount contributed by the employer to Archer MSAs of [employees](/usc/26/101.md?p=i-3) for taxable years of such [employees](/usc/26/101.md?p=i-3) ending with or within such calendar year.
- (c) **Waiver by Secretary—** In the case of a failure which is due to reasonable cause and not to willful neglect, the Secretary may waive part or all of the tax imposed by [subsection (a)](#a) to the extent that the payment of such tax would be excessive relative to the failure involved.
- (d) **Employer required to make comparable MSA contributions for all participating employees—**
  - (1) **In general—** An employer meets the requirements of this subsection for any calendar year if the employer makes available comparable contributions to the Archer MSAs of all comparable participating [employees](/usc/26/101.md?p=i-3) for each coverage period during such calendar year.
  - (2) **Comparable contributions—**
    - (A) **In general—** For purposes of [paragraph (1)](#d-1), the term “comparable contributions” means contributions—
      - (i) which are the same amount, or
      - (ii) which are the same percentage of the annual deductible limit under the high deductible health plan covering the [employees](/usc/26/101.md?p=i-3).
    - (B) **Part-year employees—** In the case of an [employee](/usc/26/101.md?p=i-3) who is employed by the employer for only a portion of the calendar year, a contribution to the Archer MSA of such [employee](/usc/26/101.md?p=i-3) shall be treated as comparable if it is an amount which bears the same ratio to the comparable amount (determined without regard to this subparagraph) as such portion bears to the entire calendar year.
  - (3) **Comparable participating employees—** For purposes of [paragraph (1)](#d-1), the term “comparable participating [employees](/usc/26/101.md?p=i-3)” means all [employees](/usc/26/101.md?p=i-3)—
    - (A) who are eligible individuals covered under any high deductible health plan of the employer, and
    - (B) who have the same category of coverage.

    For purposes of [subparagraph (B)](#d-3-B), the categories of coverage are self-only and family coverage.

  - (4) **Part-time employees—**
    - (A) **In general—** [Paragraph (3)](#d-3) shall be applied separately with respect to part-time [employees](/usc/26/101.md?p=i-3) and other [employees](/usc/26/101.md?p=i-3).
    - (B) **Part-time employee—** For purposes of [subparagraph (A)](#d-4-A), the term “part-time [employee](/usc/26/101.md?p=i-3)” means any [employee](/usc/26/101.md?p=i-3) who is customarily employed for fewer than 30 hours per week.
- (e) **Controlled groups—** For purposes of this section, all [persons](/usc/26/4377.md?p=b-1-A) treated as a single employer under subsection [(b)](/usc/26/414.md?p=b), [(c)](/usc/26/414.md?p=c), [(m)](/usc/26/414.md?p=m), or [(o)](/usc/26/414.md?p=o) of section 414 shall be treated as 1 employer.
- (f) **Definitions—** Terms used in this section which are also used in [section 220](/usc/26/220.md) have the respective meanings given such terms in section 220.

## Source credit

(Added Pub. L. 104–191, title III, § 301(c)(4)(A), Aug. 21, 1996, 110 Stat. 2049; amended Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(8), (b)(2)(D)], Dec. 21, 2000, 114 Stat. 2763, 2763A–629; Pub. L. 107–147, title IV, § 417(17)(A), Mar. 9, 2002, 116 Stat. 56.)

## Notes

### Editorial Notes

### Amendments

2002—Pub. L. 107–147 substituted “Archer MSA contributions” for “medical savings account contributions” in section catchline.

2000—Subsec. (a). Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(8)], substituted “Archer MSA” for “medical savings account”.

Subsecs. (b), (d)(1). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(2)(D)], substituted “Archer MSAs” for “medical savings accounts”.

Subsec. (d)(2)(B). Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(8)], substituted “Archer MSA” for “medical savings account”.

### Statutory Notes and Related Subsidiaries

### Effective Date

Section applicable to taxable years beginning after Dec. 31, 1996, see section 301(j) of Pub. L. 104–191, set out as an Effective Date of 1996 Amendment note under section 62 of this title.