HSA Implementation
HSA Implementation
Health Savings Accounts
BNY Mellon - Features
BNY Mellon
• Integrated account and investment management platform on WageWorks.com
• FDIC insured, interest-bearing “liquid” account
• Mutual funds with no per-trade fees
• Automatic fund allocation capabilities
• 24/7 access to statements and tax forms
BNY Investment Options
• 32 standard investment options (refer to Appendix)
• Low $1,000 balance requirement
• No minimum investment amounts
• No additional trading fees
• No additional enrollment or separate site access is required to invest
• Trades clear in 1-2 business days
HSA Enrollment
Online Application Completion• Two step process for employees
• Enroll via employer portal (step 1)
• Employee completes online acceptance via WageWorks Participant Site, including acceptance of
HSA Terms & Conditions (step 2)
HSA Eligibility & Limits
• Enrolled in eligible HDHP
• Not covered by other non-HDHP insurance, Medicare, VA benefits, or full-purpose/standard FSA (including spouse’s)
• Partners (anyone receiving a K1 instead of W2) are only eligible to contribute on a post-tax basis
IRS Limits Health Savings Accounts
2019 2020 Type of Coverage
HSA Annual Contribution Limit – cannot exceed
$3,500 $3,550 Self Only Coverage
$7,000 $7,100 Individual with Family Coverage
$1,000 $1,000 Catch Up Contribution for Age 55 or over
Annual HDHP Out of Pocket Expenses cannot exceed
$6,750 $6,900 Self Only Coverage
$13,500 $13,800 Individual with Family Coverage
Annual HDHP Deductible – cannot be less than
$1,350 $1,400 Self only Coverage
$2,700 $2,800 Individual with Family Coverage
Customer Identification Program (CIP)
• Identity verification/vetting
• According to the US PATRIOT Act of 2003, financial institutions are now required to obtain, verify, and record specific information
• The following information is collected at time of
enrollment for CIP:
• Name
• Date of Birth
• SSN
• Residential address
• Communication campaign to PPT about CIP
• BNY Mellon developed a patent-pending process for verifying the identity of account owners to comply with regulatory obligations related to Section 326 of the USA PATRIOT Act.
• Process includes:
• Non Documentary Verification Method
• Document Verification Method
• Failure to Identify Situations
• Government List Matching
CIP REQUIREMENTS
EMPLOYER ADVANTAGE
Potential CIP Failures Reasons
Data Accuracy is critical for avoiding CIP Failure and ensuring the participant has a positive enrollment experience
CIP failure is commonly associated will data entry errors or changes not yet reflected in the Federal Databases.
Most common CIP issues:
• DOB does not match SSN: numbers could be transposed or entered incorrectly.
• Address: Although we can accept a PO Box for a mailing address, BNY Mellon will
require a residential address to verify an individual.
• Not enough history, credit or other information: often occurs with younger or foreign-
based individuals
CIP Failure Timeline
Days 1-5
• BNY Mellon completes first level review
• CIP Code Assigned
•Pass
• In Process
Days 15-45
• BNY Mellon completes secondary review for accounts designated as “In Process”
• Initial notice sent to the account owner once the second level review is complete
Days 65-70
• BNY Mellon mails Final Reminder if no response
Day 90
• Account liquidated and closed
• Proceeds are sent to the account owner
WageWorks interacts with
Employer to encourage
verification
BNY notifies WageWorks of
unverified accounts
BNY Fees & Statements
• $16 transfer of assets fee
• Charged if balance is transferred to another custodian bank
• Statements
• Generated quarterly by BNY
• Batch Enrollment accounts are defaulted to paper (mailed statements)
• Employees may select for e-statement if preferred
HSA Tax Forms
▪ Deductions
and/or employer
contributions are
included in box 12
Form 1099-SA
▪ Form 1099-SA:
Provided by the
account custodian
(trustee)
▪ Reports the total
distributions from the
account
▪ Mailed and available
online in January
W2 Form 5498-SA
▪ Provided by the account
custodian (trustee) to
report the total
contributions deposited
to the account
▪ Mailed and available
online in May
Form 8889
▪ Participant must complete
this form to report the HSA
activity for the tax year
▪ Form is filed with their
1040
▪ Use 1099 and W2 to
complete, as 5498 isn’t
delivered until after tax
deadline
HSA-Compatible FSA
HSA-compatible FSA may be converted to a full purpose FSA after the HDHP deductible has been met
• EE will send in request to change to full FSA by sending in copy of the EOB and the HSA/HDHP Deductible Form indicating they have met their HDHP deductible
• HSA Compatible FSA covers only Dental and Vision and the type of account is designated on the ENR file
Employee Separation Options
Receiving a Termination Date on profile (PRO) record kicks off the “orphaned” HSA process
• Spending card and other functionality remains active for the HSA
• Card will no longer access FSA account (if applicable)
WageWorks will notify the participant in writing of their options:
Do nothing / keep HSA
open with WageWorks
▪ $3.95/mo deducted
from HSA balance. Acct
will be closed if balance
falls to $0.
1Liquidate and close the account
▪ Subject to taxes plus penalty if the
liquidated funds are not used for
qualified health expenses, or not
deposited to another qualified
account within 60 days
▪ Submit BNY Mellon closure form
2Request funds be transferred
to another custodian
▪ Complete ‘new’
custodian’s Transfer of
Assets form
3
Funding & Invoicing
HSA Funding and Invoicing
• No prefund or up front funding required
• When the funding file is sent to WageWorks the grand total of the contributions and deductions fo the open HSA accounts will be debited from your bank account the next business day
• The amount is then applied to the open employee accounts on the third business day
Monthly service fees for HSA will be charged on same invoice as FSA service fees
HSA Funding Record Timing
• Submit Funding (FND) record (based on payroll or employer contribution cycle)
• If posted by 2:00pm CST will process same day
• ‘Funding Date’ determines processing date (if later than date of file load)
• Files posted after the ‘Funding Date’ process when received
• Contributions for yet-to-be-opened accounts are set to ‘Pending’ (not sent to BNY)
Day 1
• Funding Report generated
• Captures only funds that were able to post to open HSAs
• Daily Funding Invoice sent to client based on Funding record
Day 2
• BNY reports to WW what was posted and rejected (due to closed account)
• Funding due to WageWorks (WW will pull funds via ACH Debit)
• Funds visible on WageWorks’ website
• Funds are available in the account holder’s HSA (on Card in evening)
Day 3
HSA Pending Contributions
▪ When can a pending contribution occur?
▪ The HSA Funding record is received for a participant, and at the time of receipt the participant’s
account has not been opened by the custodian (incomplete application)
▪ Plan Sponsor contributions will pend until the participant passes the Customer Identification Program
at the Custodian Bank
▪ Once the participant account is open all PENDING contributions will be applied and included on the
next day’s HSA Contribution Funding report for the grand total of the previously pended amount
HSA Expired Contributions
Per IRS Regulations, in order to apply a contribution to a HSA in a given calendar
year, the HSA must be opened before 12/31 of the same year
All pending contribution records in the WageWorks database with a Funding Date
prior to 1/1 will be expired shortly after 1/1 of the new plan year
HSA Funding File Corrections
If negative HSA Funding record amount is sent, the record will reject.
• All reversals must be requested with the WageWorks Relationship Manager and processed by the
WageWorks HSA Operations team
The entire funding record amount must be reversed
• Partial amounts can not be reversed
• The reversed amount will appear as a credit on the next funding report, reducing the amount you are
charged for that HSA contribution cycle
• Example: A $250 funding record is sent, the amount should have been $175 based on payroll deductions
• An adjustment will reverse the $250 record
• A new record for $175 will need to be sent
Communications
WageWorks Materials and Support Options
• Pre-Enrollment (Visible online through the OE Kit:
https://www.wageworks.com/employers/open-enrollment/media-gallery.aspx )
• Flyers, Brochures, Posters
• Sample Email Templates
• Videos
• Post Enrollment
• Quick Start Guide
• Email Reminders
Online Account Accesswww.wageworks.com Click to View How to Videos
Online Account Registration
First Name: must match the Profile
(i.e. legal name, nick name, etc.)
Last Name: same as First Name
(consider name changes for marriage,
etc.)
Date of Birth: only month and day are
required
Home Zip: must match the Profile
ID Code: last 4 digits of Unique ID, most
commonly Social Security Number or
Employee ID
Online Features & Functionality
▪ One online view of all activity for all plan types is always available
▪ Claim/reimbursement notices can be sent when claim submitted, approved/denied, and paid out (mailed if email is not on file)
▪ Employees can also select to receive text message notifications
EZ Receipts App (FSA, HRA, HSA,
Commuter)
Put the power of the program at employees fingertips.
Submit claims and view status
Check account balances
View recent card transactions
Upload and store receipts
Review deadlines for placing, changing or canceling orders
Look up eligible expenses
Order replacement cards (Healthcare only)
EZ Receipts App (ESP)
Put the power of the program at employees
fingertips.
▪ Submit claims and view status
▪ Check account balances
▪ View claims status
▪ Upload and store receipts
▪ Look up eligible expenses
Customer Service
▪ 1-877-WAGEWORKS (877-924-3967)
▪ Live Chat
▪ 24 hours a day/7 days a week
Appendix
Investment Fund List (32) Mutual Fund Name Symbol
Davis New York Venture Class Y DNVYX
Victory Diversified Stock I VDSIX
JP Morgan Large Cap Growth Class 1 SEEGX
Vanguard Dividend Appreciation Index Investor VDAIX
Schwab Fundamental U.S. Large Company Index SFLNX
Vanguard 500 Index Fund Admiral Shares VFIAX
Artisan Small Cap Fund APHSX
Oppenheimer Main Street Sm&Mid Cap MIGYX
Neuberger Berman Mid Cap Intrinsic Val Inv NBRVX * Closed to new investors
American Century Mid Cap Value Investor Class AVUAX
Parnassus Mid Cap Fund PARMX
Vanguard Small Cap Index Admiral Class VSMAX
JP Morgan Small Cap Value Class I PSOPX
Dodge & Cox International Stock Fund DODFX
Thornburg International Value Class I TGVIX
Vanguard Developed Markets Index Admiral VTMGX
Vanguard Emerging Markets Stock Index Admiral VEMAX
Harbor International Fund Instl Class HAINX
American EuroPacific Growth Fund Class R-6 RERGX
Large Cap - U.S. Equity
Small and Mid Cap - U.S. Equity
Non-U.S. Equity
Investment Fund List Mutual Fund Name Symbol
Harbor Bond Fund HABDX* Closed to new investors
AMG Intermediate Duration Government Fund MGIDX
Vanguard Short Term Investment Grade VFSTX
Dodge & Cox Income Fund DODIX
Metropolitan West Total Return Bond Class M MWTRX
Pimco Low Duration I PTLDX* Closed to new investors
Vanguard Long-Term Bond Index Investor VBLTX
Vanguard LifeStrategy Conservative Growth Investor VSCGX
Vanguard LifeStrategy Moderate Growth Investor VSMGX
American 2020 Target Date Class R6 RRCTX
American 2025 Target Date Class R6 RFDTX
American 2030 Target Date Class R6 RFETX
American 2035 Target Date Class R6 RFFTX
American 2040 Target Date Class R6 RFGTX
American 2045 Target Date Class R6 RFHTX
American 2050 Target Date Class R6 RFITX
American 2055 Target Date Class R6 RFKTX
Fixed Income
Asset Allocation