A health savings account (HSA) is a tax-advantaged medical saving account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP).
This article provides step-by-step instructions for configuring HSA plans in Employee Navigator. The sections below include:
- Plan Configuration
- Payroll Setup and Configuration
- HSA Enrollment
A Plan Configuration
In Employee Navigator the HSA plan is built as an independent plan and is not configured within the Medical Plan model. The process of tying these plans together is defined below under the "HSA plan Configuration" section of this article.
Input basic policy information. This tab is standard across all plan types. Refer to the following article for more information: Base plan Setup:Policy Info Tab
Customize the employee experience by adding optional plan summary under this tab.
Eligibility & Enrollment
Define additional plan eligibility options that should be enforced during employee enrollment. This tab is standard across all plan types. For more info: Basic Plan Setup: Eligibility Rules
Define additional enrollment options that should be enforced such as Allowing employees to Decline the benefit when enrolling. If this box is checked, this means employees are able to decline.
Optional eligibility underwriting questions that are presented during enrollment to ensure employees and/or spouses meet minimum necessary requirements to enroll in the plan. Note, if there are no active agency questions, a message will display indicating there are no available questions. Assuming this is already complete, you can select Add a Question. If more than one are available, select which question is applicable to this plan.
Disclosures are another vehicle of getting the required information to an employee regarding enrollment in a plan. Disclosures are slightly different from questions in two ways. First, the employee is not presented with an option to agree/disagree with disclosure language. It is automatically presented on the page after the employee enrolls an employee cannot break the flow without closing out the disclosure. Secondly, the disclosure does not make an employee ineligible for a plan if they do not complete an action. After an employee enrolls in a plan that has an active disclosure, the disclosure language is presented on the page before the next enrollment is presented to the employee.
For more info on Questions and Disclosures: Underwriting Questions and Disclosures
Contingent Plan Setup
- Medical plan must be marked as “HSA IS Offered” from the enrollment/standard tab Add multiple contingency plans for each medical plan that offers HSA instead of creating multiple HSA plans
- Employer contributions can vary based on enrolled medical plan.
- If employer only gives 2 levels of contributions, set up the contributions for the employee and family level instead of all tiers.
- Pro-rated employer contribution will require funding calendar configuration (from HSA plan setup, Enrollment tab, Calendar sub tab)
- Minimum employee contribution is optional
Funding Calendar - Required when 'Pro-rate Employer Contribution' is Selected
Funding dates determine how many months of employer contribution employee is eligible to receive
Add the date next to each month, typically funding will occur on the first or the last of the month
- If funding occurs each pay period, simply put in the first day of each month as the funding dates
Employees with active coverage on the funding date will receive the employer contribution for that month
IRS Max Contribution Limits: The IRS limits are already pre-built into the logic of the HSA plan, so you don't need to worry about setting this up. We've already done it for you!
Additional Setup Pieces
Payroll Setup and Configuration
For details and complete instructions on the setup and configuration of payroll groups, see the full support article here: https://employeenavigator.zendesk.com/entries/26688890-Payroll-Setup
Payroll setup is required when administering HSA and cafeteria plans*
Employee and employer contributions are per pay elections
Pay dates are essential for plan year allocations and IRS calendar year limit calculations
A single HSA plan can support variable contribution structure from multiple medical plans
Employee and Employer contributions are optional
- HSA must coincide with medical plan year.
- Year-to-Date contribution calculations help enforce the IRS calendar year allocation limits for off-calendar HSA plans
Configure employee access to update employee contributions mid-year though life event setup
- From the company's Benefits tab > Life Events > select Add / End Coverage
- Select Edit next to Coverage Reason = "Change HSA"
- Select Employee Visible = yes to allow employees to see Change HSA
- Select Approval Required = yes to pend mid-year change for HR Approval
HSA Enrollment Windows
- Employee elects a Per Pay Contribution
- Display the Projected Deferral through the end of the plan year
- Additional details available in “View More Details”
- YTD Contribution: Contribution for the current calendar year, useful at open enrollment when HSA is off-calendar year
- Annualized Plan Summary: Contribution if enrolled through an entire plan year, useful for mid-year new hires who want to see what their contribution projects would be if contributing for the entire plan year.
Admin tool to correct HSA enrollment
YTD history resets as if the new contribution values had been occurring since effective date
Do not use this tool for mid-year election changes
Mid-Year Change HSA (changed cannot pend for HR approval at this time)
To allow employees to make mid-year changes to their HSA contributions go to the company's Benefits tab> Life Events> Add / End Coverage > 'edit' next to Change HSA. Check the box for Employee Visible and save.
- Employee Change HSA by going to Benefits (from their homepage)> Change Coverage> Add or Adjust Coverage> Adjust HSA.
- Employee can start, change or end employee contribution
- Change date must be prospective
- Employee limit for remaining of year
- Calculation will instruct employee on the max they can elect through the remainder of the plan year based on what has already been contributed
- Employee cannot elect lump sum (feature coming soon)
Issue: The 'add a new contingent plan' link is greyed out and I can't click on it.
Reason: You didn't check the box for 'HSA is Offered' under the medical plan's setup. Go to the corresponding medical plan's Enrollment tab> Standard and check the box next to 'HSA is offered'.
Issue: I updated the HSA plan design (pro-rate, ER contributions, etc. and recalced the plan, but ee records are still wrong.
Reason: Changes made to HSA plan designs require a resave (or decline, save & re-elect) of the HSA page in the enrollment flow in order to reset and apply changes to previous enrollments.
Important Things to Note:
- Per IRS guidelines, HSA enrollment effective start dates and contributions must begin on the first day of the month. This logic was built into our system, so all HSA enrollments will begin on the first of the month, regardless of the plan eligibility rules (https://www.irs.gov/publications/p969/ar02.html).
- HSA/HRA plans were designed to require ee enrollment in a tied medical plan in order for the ee to be eligible for the HSA/HRA plan. This means that both the medical and HSA/HRA plans must be presented to ees in the same enrollment window (e.g. both in OE or both in NH). When eligibility rules differ for these plans, they may split between NH/OE windows during an OE season and indicate that an ee is ineligible for enrollment in the HSA/HRA due to the medical enrollment storing under the other window.
- Our system was designed to handle HSA/HRA and cafeteria plans on a calendar year basis. That said, it is best practice to not only setup your HSA/HRA/cafeteria plans with the same plan year as your medical plans, but to also setup your medical and HSA/HRA/cafeteria plans on a calendar year.
- Since we are an enrollment-based system, we use the current year's IRS maximum to calculate the max contribution limit during the enrollment process. When an HSA/HRA/cafeteria plan is setup on an off-cycle plan year, the system is simply taking the remaining pays in the current calendar year and applying the IRS max limit accordingly. This calculation does not take into account that once a new calendar year begins, the enrollment may need to be modified to ensure that the employee is not contributing over the annual max. This enrollment is not managed through the EN system, and is something that would need to be managed through payroll and audited in the system. The employee would need to utilize the 'Change HSA' life event tool to change their per pay contribution accordingly.It is advised that you setup your medical and HSA/HRA/cafeteria plans on a calendar year in order for the system to apply the IRS max limits as expected.
- ER contribution schedules outside of per pay/monthly are not support when plan Pro-rate Employer Contribution is checked. Ex: quarterly, 2x year, etc.
- Before you open up the plan for enrollment, double check that the plan design (ER contributions, pro-rated, etc.) and the company's payroll groups/calendars are setup correctly. If you make changes to the plan or payroll calendar/frequency AFTER ees enroll, those changes won't apply to the already processed enrollments. The only way to update those enrollments is to decline, save and re-enroll ees in the enrollment flow (NH/OE/Modify).
- The enrollment editor tool doesn't support HSA/HRA enrollments (even though they display on-screen under the enrollment editor) - so overriding effective dates and contribution amounts won't actually update the ee's record. This means ER contribution amounts are calculated according to the plan design and there's no way to override this amount for individual ees.