HSA Fact Sheet for Administrators

Transcription

1 HSA Fact Sheet fr Administratrs This HSA Fact Sheet fr Administratrs is fr grups ffering a Cnsumer-Directed Health Plan 1 /Health Savings Accunt (CDHP/HSA) thrugh The Episcpal Church Medical Trust (Medical Trust). It prvides detailed infrmatin abut HSAs and instructins n hw t fund accunts when using HealthEquity, ur HSA vendr. HSA Basics Accunts are wned by the emplyee Accunts are prtable frm emplyer t emplyer Unused funds rll ver frm year t year HSA funds can earn interest Funds in the HSA may be invested (nce any applicable minimum threshld is met) Withdrawals frm the HSA are nt subject t federal incme tax when they are used t pay fr qualified medical expenses Emplyees may nt be cvered under any health plan that is nt a qualified high deductible health plan (HDHP) such as the CDHP, must nt be enrlled in Medicare, and may nt be claimed as a dependent n anther individual s tax return Emplyees wh are 65 years r lder and are enrlled in Medicare may n lnger fund an HSA, but they may cntinue t spend amunts previusly cntributed fr qualified medical expenses and Medicare premiums. HSA Overview A qualified CDHP such as the Cigna CDHP, the Kaiser CDHP, and the Anthem Blue Crss and Blue Shield (Anthem BCBS) CDHP ffered thrugh the Medical Trust, allws emplyees t pen an HSA if certain requirements are met. Emplyees pay n federal incme taxes n cntributins (r n earnings frm cntributins) t their HSAs up t the annual limit established by the IRS. Withdrawals frm an HSA (including earnings) are nt subject t federal incme tax when they are used t pay fr qualified medical expenses. Emplyees may chse t pay fr expenses ut-f-pcket and let the tax-favred funds grw in their HSA fr future healthcare expenses, r they may chse t use the HSA funds as needed. Additinal infrmatin abut HSAs may be fund in ur CDHP/HSA Fact Sheet fr Members available n Yu may als visit HealthEquity s member resurce site. Because f their tax-favred status, HSAs are subject t specific legal requirements. (See IRS Publicatin 969.) We have prvided sme infrmatin in this dcument; hwever, we recmmend yu wrk with yur tax, accunting, and legal resurces t ensure all requirements are being met regarding funding and tax reprting. HSA Eligibility T pen an HSA, individuals must be enrlled in a qualifying HDHP. Generally, ther health cverage is nt permitted, with these exceptins: supplemental health cverage; separate dental and visin cverage; and disability cverage. Disqualifying health cverage includes nn-hdhp cverage under a plan f yur spuse s r dmestic partner s emplyer, Medicare, and healthcare flexible spending accunt (FSA) 1 Frmerly referred t as High Deductible Health Plans

2 cverage. Hwever, cverage is permitted under a limited-purpse flexible spending accunt (LPFSA), which is designed t wrk with an HSA. In additin, yu may nt be claimed as a dependent n anther individual s tax return. Annual HSA Emplyer & Emplyee Cmbined Cntributin Limits Individual $3,350 Individual $3,400 Family $6,750 Family $6,750 Emplyees wh are age 55 r lder by the end f the year may make an additinal cntributin, up t $1,000. The emplyee is respnsible fr ensuring the maximum annual cntributin limit is nt exceeded. The deadline fr making HSA cntributins fr a year is the filing deadline fr that year fr an individual s federal incme tax return withut extensins (i.e., 2016 cntributins must be made n later than April 17, 2017). Emplyee cntributins can be made: On a pre-tax basis thrugh salary reductins as part f a cafeteria plan On a pst-tax basis with a crrespnding adjustment t incme when filing yur taxes By ther family members wh are qualified individuals. Emplyer cntributins can be made n a tax-favred basis: Emplyer cntributins must be cmparable fr similarly situated emplyees (unless cntributins are made thrugh a cafeteria plan, as described belw) Mre infrmatin n cmparability appears in the Cmparable Cntributins sectin f this dcument; yu may als refer t pages 140 and 152 f the HSA Guide Bk (see HSA Infrmatin frm HealthEquity n page 4). Emplyer HSA Cntributins Each emplyer (parish, dicese, r ther Episcpal rganizatin) is respnsible fr defining its wn cntributin strategy and ensuring it meets IRS requirements. Yu may need t wrk with yur wn tax experts t ensure cmpliance with tax requirements. Fr guidance, refer t pages f the HSA Guide Bk. The cntributin strategy will define the amunt f funds, if any, the emplyer will be depsiting t an emplyee s HSA, the frequency with which these cntributins will be made (biweekly, weekly, mnthly, quarterly, r annually), and wh will be eligible fr any such cntributins. The emplyer is respnsible fr cmmunicating its cntributin infrmatin t emplyees n an annual basis. Prerequisites fr HSA Cntributins Cntributins can be depsited int a member s accunt nly: 1. If the member is an eligible individual (i.e., has qualifying CDHP cverage and des nt have ther disqualifying health cverage) 2. After the member s HSA is pened 3. Once the qualifying CDHP cverage is in frce. HSA Member Setup Members may chse their wn bank t administer their HSA, r use HealthEquity, the Medical Trust s HSA vendr. The Medical Trust cvers the cst f the administrative fees charged by HealthEquity t create and maintain nline prtals fr emplyer grups. Members wh enrll in any CDHP thrugh the Medical Trust will autmatically have an HSA created by HealthEquity and will receive a welcme kit, but it is up t the member t decide whether t use HealthEquity. If the member uses HealthEquity as the HSA custdian, there are n setup fees fr the HSA and maintenance fees fr the subscribing member nly are waived, prvided the member is emplyed with a participating

3 emplyer. If a subscriber s emplyment is terminated r if the member is n lnger enrlled in a Medical Trust CDHP, s/he will be respnsible fr all fees. Members wh d nt wish t use HealthEquity as their HSA custdian can chse, after cnsulting with their emplyer, t establish an HSA with any apprpriate institutin (e.g., thse qualified t administer IRAs), but they will be respnsible fr all fees. Emplyees wh d s, hwever, will likely nt be able t direct t that financial institutin cntributins by their emplyer (if any) r pre-tax salary reductin cntributins. Cnsequently, such emplyees may lse valuable emplyer cntributins and the ability t make cntributins thrugh cnvenient payrll deductin. (They will still be able t make after-tax cntributins up t the applicable cntributin limit and claim a crrespnding deductin n their federal incme tax return.) Emplyer Submissin f Cntributins t HSAs Beginning n Octber 18, 2016, emplyers wh ffer CDHPs thrugh the Medical Trust will n lnger fund their emplyees linked HSAs thrugh Nrthern Trust. Between Octber 18 and 24, emplyer grups will transitin t a secure nline prtal maintained by HealthEquity that will enable the direct transfer f cntributins t member accunts. Funding HSAs thrugh HealthEquity s nline prtal has multiple advantages, including streamlined cntributins, greater cntrl, and access t detailed accunt recrds. Yu will be able t: Make cntributins directly t yur emplyees HSAs Link bank accunts t facilitate HSA cntributins View cntributin histry fr payments made thrugh the nline prtal Access reprts Add additinal administrative users/lgins fr ther staff in yur grup Access the HSA vendr s frms and dcuments resurce library. Once yur nline prtal has been created, yu will receive an frm HealthEquity with a link t an Emplyer Welcme Kit, and instructins fr registering yur nline prtal. If yu d nt receive the welcme kit , yu can still register yur nline prtal by cntacting HealthEquity s Emplyer Services team. The team will assist yu with the registratin prcess and is als available t cnduct individual nline prtal demnstratins. Fr inquiries prir t the start f the new funding prcess, please cntact yur IBAMS accunt representative, r Client Services at (855) , Mnday Friday, 8:30AM 8:00PM ET (5:30AM 5:00PM PT), excluding hlidays. Fr inquiries after the start f the new funding prcess, cntact HealthEquity s tll-free Emplyer Services line at (866) T access HealthEquity s Emplyer Welcme Kit after the start f the new funding prcess, g here. Please nte: if yu d nt use HealthEquity as yur grup s HSA administratr, this new prcess will nt affect yur grup. Funding f HSAs shuld cntinue as it is dne nw. In this case, yu shuld als disregard any infrmatinal materials yu receive frm HealthEquity regarding the nline emplyer prtal. If yu are interested in learning mre abut HealthEquity HSAs, please cntact yur IBAMS accunt representative. Special Infrmatin fr Dmestic Partners and Same-Gender Spuses If yur grup allws dmestic partners t be cvered as dependents n yur health plan, then an emplyee s dmestic partner can be enrlled in a CDHP. Hwever, the IRS des nt permit an emplyee s HSA funds t be used t cver the healthcare expenses f dmestic partners, unless the dmestic partner therwise qualifies as the emplyee s federal tax cde dependent. The dmestic partner can pen his r her wn HSA, which yu as the emplyer may chse t fund r nt. Nte, hwever, that an emplyer cntributin t the HSA f a nnemplyee wuld be included in the emplyee s taxable incme. Same-gender cuples wh are legally married can use the accunt in the same way as an ppsite-gender married cuple. Imprtant Tax-Related Infrmatin Yu must reprt all emplyer cntributins t an HSA (including an emplyee s cntributins thrugh an Internal Revenue Cde sectin 125 cafeteria plan) in bx 12 f Frm W-2 with cde W. D nt include

4 after-tax emplyee cntributins t an HSA in Bx 12. The emplyee will reprt after-tax cntributins n Frm Fr further infrmatin, refer t IRS Publicatin 969. Cmparable Cntributins If yu decide t make emplyer HSA cntributins, yu must make cmparable cntributins t the HSAs f all cmparable participating emplyees (as defined belw). Yur cntributins are cmparable if they are either: The same amunt The same percentage f the annual deductible limit under the CDHP cvering the emplyees. Nte: The cmplicated cmparability rules discussed belw d nt apply t pre-tax cntributins made thrugh a sectin 125 cafeteria plan maintained by the emplyer. Cmparable Participating Emplyees Defined Cmparable participating emplyees: Are cvered by yur CDHP and are eligible t establish an HSA Have the same categry f cverage (either self-nly r family cverage) Have the same categry f emplyment (part-time, full-time, r frmer emplyees). T meet the cmparability requirements fr eligible emplyees wh have nt established an HSA by December 31 r have nt ntified yu that they have an HSA, yu must meet a ntice requirement and a cntributin requirement. Yu will meet the ntice requirement if by January 15 f the fllwing calendar year yu prvide a written ntice t all such emplyees. The ntice must state that each eligible emplyee wh, by the last day f February, establishes an HSA and ntifies yu that s/he has established an HSA, will receive a cmparable cntributin t the HSA fr the prir year. Fr a sample f the ntice, see page 5. Yu will meet the cntributin requirement fr these emplyees if by April 15 f the fllwing calendar year, yu cntribute cmparable amunts plus reasnable interest t the emplyee s HSA fr the prir year. Nte: Fr purpses f making cntributins t HSAs f nn-highly cmpensated emplyees, highly cmpensated emplyees shall nt be treated as cmparable participating emplyees. Excise Tax If a participating emplyer makes cntributins t emplyees HSAs that are nt cmparable, the emplyer must pay an excise tax f 35% f the amunt cntributed t the IRS. Emplyment Taxes Emplyer cntributins t their emplyees HSAs are generally nt subject t emplyment taxes (e.g., Scial Security and Medicare). HSA Infrmatin frm the U.S. Treasury Department The HSA sectin f the IRS website includes links t infrmatinal brchures, current regulatins, FAQs, IRS frms, and publicatins such as: Publicatin 502 A list f qualified medical expenses Publicatin 969 A detailed explanatin f HSAs and hw the IRS treats them HSA Infrmatin frm HealthEquity Cmplete infrmatin abut HSAs is available nline frm HealthEquity: Member resurce site HSA Guide Bk Invest Yur HSA Dllars

5 Sample Ntice Prtins requiring custmizatin appear in blue. Ntice t Emplyees Regarding Emplyer Cntributins t HSAs: This ntice explains hw yu may be eligible t receive cntributins frm [emplyer name] if yu are cvered by a Cnsumer-Directed Health Plan (CDHP) thrugh The Episcpal Church Medical Trust. [Emplyer name] prvides cntributins t the Health Savings Accunt (HSA) fr each emplyee wh is [insert emplyer s eligibility requirements fr HSA cntributins] ( eligible emplyee ). If yu are an eligible emplyee, yu must d the fllwing in rder t receive an emplyer cntributin: (1) Establish an HSA n r befre the last day in February f [insert year after the year fr which the cntributin is being made] and (2) Ntify [insert name and cntact infrmatin fr apprpriate persn t be cntacted] f yur HSA accunt infrmatin n r befre the last day in February f [insert year after year fr which the cntributin is being made]. [Specify the HSA accunt infrmatin that the emplyee must prvide (e.g., accunt number, name and address f trustee r custdian, etc.) and the methd by which the emplyee must prvide this accunt infrmatin (e.g., in writing, by , n a certain frm, etc.)]. If yu establish yur HSA n r befre the last day f February in [insert year after year fr which the cntributin is being made] and ntify [emplyer name] f yur HSA accunt infrmatin, yu will receive yur HSA cntributins, plus reasnable interest, fr [insert year fr which cntributin is being made] by April 15 f [insert year after year fr which cntributin is being made]. If, hwever, yu d nt establish yur HSA r yu d nt ntify us f yur HSA accunt infrmatin by the deadline, then we are nt required t make any cntributins t yur HSA fr [insert applicable year]. Yu may ntify us that yu have established an HSA by sending an [ r] a written ntice t [insert name, title, and, if applicable, address]. If yu have any questins abut this ntice, yu can cntact [insert name and title] at [insert telephne number r ther cntact infrmatin]. Please nte that this dcument is prvided fr infrmatinal purpses nly and shuld nt be viewed as an ffer f cverage, legal, medical, tax r ther advice. Please cnsult with yur wn prfessinal advisr fr further guidance. In the event f a cnflict between this dcument and the fficial plan dcuments, the fficial plan dcuments will gvern. The Church Pensin Fund and its affiliates retain the right t amend, terminate r mdify the terms f any benefit plans described in this dcument at any time, fr any reasn and unless required by law, withut ntice. The Plans are church plans within the meaning f sectin 3(33) f the Emplyee Retirement Incme Security Act and sectin 414(e) f the Internal Revenue Cde. Nt all Plans are available in all areas f the United States, and nt all Plans are available n bth a self-funded and fully insured basis. The Plans d nt cver all healthcare expenses, and members shuld read the fficial Plan dcuments carefully t determine which benefits are cvered, as well as any applicable exclusins, limitatins, and prcedures. 9/16