Full Service Health Savings Account. Client Administrative Portfolio

Transcription

1 Full Service Health Savings Account Client Administrative Portfolio 1

2 Thank You for Participating in the FlexSystem Full Service Health Savings Account As a FlexSystem Full Service Health Savings Account (HSA) Client, you are taking part in a benefit program that makes medical costs more affordable for your employees. We hope you will become familiar with the materials within this folder; they provide a comprehensive and tailored review of your Plan. We look forward to being of service to you. What is a FlexSystem Health Savings Account? An HSA is established by an eligible individual to pay the qualified medical expenses incurred by an eligible individual and any dependents. An eligible individual is any individual covered under a High Deductible Health Plan (HDHP), which is a health plan with an annual deductible of not less than $1,200 for single coverage and $2,400 for family coverage. Contributions to the HSA may be made by the qualified individual, an employer of the qualified individual, or both. The maximum annual contribution amount is indexed annually. For 2012, the annual contribution maximum is $3,100 for single coverage, or $6,250 for family coverage. Unused contributions to the HSA are not forfeited at the end of the plan year; instead they roll over from year-to-year (even if offered under a Cafeteria Plan). In addition, when an employee moves from one employer to another the contributions are not lost; they are portable. Reimbursement distributions may not exceed the amount in the HSA at the time of the request, and may not be included in gross income if used to pay for qualified medical expenses. Qualified expenses include amounts paid for medical care as defined in Code Section 213. How does it save money? Employer and employee contributions alike are made on a pre-tax basis via payroll deduction and are treated the same as the other benefits under the Cafeteria Plan; they are not subject to state (certain states apply) or federal income tax, or FICA tax. Paying for these expenses on a pre-tax basis allows your employees to increase their take home pay without costing you more money. In fact, employee participation in the HSA will save you FICA taxes! How does the Full Service HSA work? FlexSystem provides everything you need to open and manage your employees HSA accounts, including amending the FlexSystem Section 125 Plan document. As part of the Full Service HSA enrollment process, FlexSystem will work with your Participants to open HSA accounts for each of your participating employees at our partner financial institution, M&I Bank FSB. M&I Bank FSB is a subsidiary of the Marshall & Ilsley Corporation. Founded in 1847, M&I Bank FSB ranks among the nation s oldest and largest financial institutions and currently has $46.2 billion in assets. M&I Bank FSB is strategically focused on the HSA product and its benefits. Once the HSA accounts are open you may begin depositing funds withheld from your employees payroll into their accounts. This is accomplished using FlexSystem s Payroll Verification Report process. There are four options that an employee can use to request reimbursement from their HSA account: M&I check card, M&I paper checks (optional for a nominal fee), on-line transfer request, and manual transfer request. A Participant can pay for a qualified expense at the time of purchase with the M&I check card or the optional M&I paper checks or the employee can complete a HSA Transfer Request (either on-line or via paper) and the funds will be transferred from their HSA account to their personal banking account via direct deposit. It s that simple! 2

3 How does the HSA coordinate with your Cafeteria Plan benefits? Under certain circumstances an employee may establish and fund an HSA in addition to funding a health Flexible Spending Account (FSA). Both accounts may be funded as long as the benefits being reimbursed through the health FSA are limited to benefits or costs that are not paid by the high deductible health plan itself. For example, if the HDHP does not cover dental or vision expenses, the health FSA may be established to reimburse dental and vision expenses exclusively. Full Service HSA Enrollment Administration and Participation 1 Review the following material. Carefully review all of the documents. Take care to identify your master forms for reference and any required subsequent duplication. 2 Distribute the HSA Enrollment Kit to all eligible employees. Feel free to customize the material with a special envelope, insert, or memo. 3 Direct your employees to call for assistance with the enrollment form. FlexSystem Full HSA Participants need to determine the amount of their deductions per payroll that they wish to contribute into the HSA. They must complete a corresponding Full Service HSA Enrollment Form at the time of their eligibility or at the start of the Plan Year. Encourage your employees to call a FlexSystem Customer Service Representative for assistance with the Enrollment Form ( ). Remind them to have their form, group number, and company name ready when they call. Direct employees to return their completed enrollment forms, including the bank s M&I Health Savings Account Application and Agreement to you. Collect the forms from all eligible, participating employees. After collecting all forms, forward them to. All enrollment forms should arrive in our office no later than two (2) weeks prior to the effective date of your Plan start date. You will then begin deducting the amount elected per payroll and transmit the funds via the PVR process to FlexSystem. FlexSystem in turn will transmit the funds to the Participant s custodial HSA accounts. FlexSystem is designed to offer Participants streamlined funds management, including the rolling over of funds, routine deductions, or lump sum disbursements (as long as funds are sent in within the same calendar year as they are to be applied). 4 Verify employee deductions. FlexSystem will prepare and provide a PVR on-line, which compiles all deductions taken by Participants. Changes must be completed and submitted on-line (at (Note: Administrative Fee invoicing is separate from the PVR.) If desired, a copy of the PVR may be printed from the web and mailed with a check for payment. 5 Your enrollment is complete. Once your Participants are enrolled in the FlexSystem Full Service HSA, the HSA custodial account will be opened at our partner financial institution, M&I Bank FSB. Your Participants will then receive a packet from FlexSystem containing a HSA Full Service Funds Transfer Form. M&I Bank FSB will also send Participants a few packets of materials that include their HSA account number, M&I check card, and M&I Pin. Please note that there is an $8 one time set up fee which will automatically be deducted from each Participant s account within the first 60 days of an account opening. 3

4 FlexSystem HSA Reimbursements When a qualified expense is incurred, the Participant requests reimbursement using one of the available options (check card, check, on-line transfer or manual transfer), and then uses said funds to pay for the expense. Funds remain available to the Participant and cannot be forfeited. Refer to the Participant s Reference Guide for more specific information. FlexSystem Invoicing Practices To help FlexSystem Full Service HSA operations run smoothly, various actions must occur in a timely manner. The same is true with the payment of FlexSystem administrative fees. The FlexSystem invoicing schedule is detailed on this page. The FlexSystem HSA Processing timeline is located on the following page. Administrative Fees (Standard Invoicing) FlexSystem invoices 45 days prior to the service period. For example, the first invoice for Plans with a January 1 start date is mailed on November 15 and is due seven days from invoice date. FlexSystem HSA fees are calculated on the number of known Participants at the time the invoice is generated. The fee is the greater of the calculated total participation fee or the minimum fee. Anyone who has elected to participate in a Client s FlexSystem HSA Plan is a FlexSystem HSA Participant, and remains so from the time of election through the close of that Plan Year. also offers Clients the ease of paying administrative fees electronically seven days prior to the service period start date using E-Pay. With this feature, FlexSystem will automatically withdraw the appropriate funds to cover your invoice 7 days prior to your service period start date. Therefore, if your service period begins January 1 you have until December 23 to pay your invoice with E-Pay. If you are not signed up for E-Pay your invoice is due seven days from the original invoice date, as stated in the above paragraph. If you wish to sign up for E-Pay, please contact FlexSystem customer service. Paying Annually Save money by paying your administrative fees annually! At the time of the first invoice, FlexSystem does not know how many of your employees will be participating in the HSA Plan. As such we set the fee at a minimum level only. By paying monthly instead, the fees are adjusted when enrollment forms are submitted. (Refer to the example above.) Please make checks payable to. Checks incorrectly made out to FlexSystem HSA can cause some confusion and may delay the administration of your Plan. Contacting FlexSystem For assistance, please login to My, click on Contact Us, and submit a Service Request by selecting Other as the topic of inquiry. You may also call our Customer Care Center at , Monday-Friday 8:00 am - 5:00 pm. Please have your 12-digit ID handy when contacting us. 4

5 Full Service Health Savings Account Business Processing Event Time Line Event Event Title Duration Responsibility 1. HSA Addendum is received with payment. Varies* Provider 2. receives and enters HSA Addendum. 1+ days Event One 3. sends material for the enrollment meeting. 1+ days 4. Employer holds enrollment meeting and distributes the employee enrollment materials. Varies Provider, Employer 5. Employer collects and returns enrollment material for every employee wishing to enroll in the HSA Plan. Varies Employer, Post Office 6. processes enrollment material and forwards M&I HSA Application and Agreement to M&I Event Two 7. M&I sets up accounts and sends Welcome Kit that contains account information directly to Participants. M&I Bank Event Three & Event Four 8. M&I Bank sends the HSA check card and the HSA check card PIN in separate letter directly to Participants. M&I Bank Event Five 9. sends HSA Participant Kit directly to Participants. 2-5 days from receipt of enrollment material 10. Employer reviews and submits Participant contributions on-line each payroll via the payroll Verification Report. Varies * Employer Participant Fees (Assessed by M&I Bank) Set-up Fee $8.00 Check Card No Fee One Additional Check Card No Fee There is a $1.00 check paid fee in excess of two per month International Lane Madison, WI Fax: The information in this communication is confidential and may only be used by the authorized recipient for its intended purpose. Any other use or disclosure is prohibited. FX