401k and 403b plans have annual employee contribution limits. Employer contributions do not count against that limit (but do count against a higher separate limit).

Is there a reason HSA limits comprise both employer and employee contributions unlike the other plans, or am I comparing apples and oranges?

closed as primarily opinion-based by Nathan L, D Stanley, JoeTaxpayer Apr 20 '17 at 0:41

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    This might be a better fit for politics.SE, but why lawmakers chose the limits they chose isn't really personal finance. – Nathan L Apr 19 '17 at 20:05

am I comparing apples and oranges?

Yes - different purposes, different laws, different regulations. One rationale could be that HSA benefits are immediate while retirement benefits are deferred, so the benefit of employer contributions are not felt until retirement and thus do not need as stringent a limit, but that's a complete guess.

  • Please do not answer a question and vote-to-close. See this meta question for more information. If you thought the question was worth answering, you should allow others to do the same. – Ben Miller Apr 20 '17 at 1:14

It's going to be quite a challenge to give a definitive answer to any "Why" question about law, and especially so for a question about tax law. One would need to try to dig up statements made by the legislators (and/or their aides) crafting and debating the law. As it is, tax law is already inconsistent in many ways. (Why are there people who can't contribute to a Roth IRA directly but can contribute to a Traditional and then immediately convert it to Roth? Why are maximum limits for 401(k) plans and IRAs separate rather than being one combined "retirement" savings maximum?)

In the absence of some specific legislative statements saying that it was set up this way for some specific purpose, one must assume that it was written with the some goals as all tax law: As a compromise between various ideas, trying to accomplish some specific purpose. Feel free to add in some level of inefficiency and it being hard to completely understand the entirely of the tax law, which leads to things perhaps not being as "tidy" as one might hope for.

But there's no reason to think that the people crafting the tax advantages for HSA plans had any reason to use 401(k) plans as a template, or wanted them to accomplish the same goals.


Just like all employee benefits there is a focus on removing or limiting owners of businesses' ability to abuse tax preferences under the guise of an employee benefit.

As you point out there is an overall plan maximum 401(k) for employer contributions and match contributions. There is a nondiscrimination test for FSA programs (there is also a nondiscrimination test for medical plans under sections 125 and 105(h)). Employer contributions are counted toward the total of HSA contributions.

Why an HSA has a different maximum arrangement than 401(k) is anyone's guess. But the purpose of the limit is to prevent owners of companies from setting up plans that do little more than funnel tax free funds to themselves. An owner/employee could pay themselves a wage, contribute the maximum, then have the "employer" also match the maximum, so there are limits in place.