Health savings account (HSA) administered through Kaiser Permanente Funds from a health savings account (HSA) can be used by eligible employees to pay for any qualified expenses as defined in IRS Publication 502, Medical and Dental Expenses. HSA effective date A health savings account administered through Kaiser Permanente can be made effective the first of any month when offered with a Kaiser Permanente HSA-qualified plan. Account holders should speak to their tax counsel to discuss the IRS s annual maximum contribution limits based on their marital status, enrollment month, and other factors that may affect their maximum annual contribution. Enrollment structure Employers offering an HSA administered through Kaiser Permanente will have two enrollment units/subgroups set up for the HSA-qualified plan being offered prior to onboarding. Employers will enroll employees into one of these two enrollment units/ subgroups in order for Kaiser Permanente to designate between employees electing the HSA-qualified plan and HSA administered through Kaiser Permanente versus those employees who are electing the HSA-qualified plan only. It is the responsibility of the employer to confirm employee intent to elect an HSA administered through Kaiser Permanente prior to enrollment into the HSAqualified plan and place employees into the correct enrollment unit/subgroup. A Social Security number (SSN) must be provided for all employees electing the HSA administered through Kaiser Permanente. Details on the enrollment file setup will be provided during onboarding. Note: Employers wishing to set up multiple locations or divisions with separate funding or billing sources for their Health Payment Account should discuss this matter with their Kaiser Permanente representative prior to onboarding, as this will impact enrollment structure and account setup reporting and timing if changed during the onboarding phase. 1
HSA fees, funding, and contributions Monthly administrative fee The monthly administrative fee is $3.25 per account per month and is paid by either the employer or account holder. The employer will indicate who will pay the fee during the onboarding process. The monthly administrative fee is charged during the month of the HSA administrative services and debited via Automated Clearing House (ACH) from the employer s account on the 26th business day of the month, if employer-paid, or from the account holder s HSA, if employee-paid. The monthly administrative fee is waived for the following month when the average daily account balance for any month reaches $2,000 or more. The monthly administrative fee will begin to be assessed at the time of the employee s enrollment into the HSA-qualified plan. See Enrollment structure for detail on how employee elections are made. Setup fees Standard setup: No fee Nonstandard/custom setup: Setup fees for a custom or nonstandard installation will be determined based on assessment of the customer s specific request. Custom or nonstandard requests will be any request for an option or capability not presented in this document. Banking arrangements Kaiser Permanente Health Payment Services manages employer-paid monthly administrative fees and payroll withholding contributions to the HSA via ACH transactions. During the onboarding process, the employer will indicate which bank account they would like to have the ACH transactions debited from by completing and signing an ACH form to that effect. For HSA monthly administrative fees, which are debited on the 26th of each month, employers will receive an Employer Fee Funding Notification email 24 hours in advance of the ACH transaction. Employers can use these reports to reconcile their account. 2
HSA funding methods An HSA can be funded by the employer, the employee, an external party, or all of these. Employee or external party funding can be done by payroll withholding (employee only, and if allowed by the employer), check, or e-contribution via an online bank transfer. Employer funding of the HSA is done using an employer-determined amount and frequency and can include contributions tied to the completion of specific wellnessrelated activities as designated by the employer. Account holders will only have access to the funds that have been contributed into the account to date. The account holder s HSA will be established and contributions will post to the account after the account holder has accepted the online terms and conditions and Disclosure and Authorization Agreement upon their initial login to the Health Payment Online Portal. Any contributions pulled from the employer s account prior to the terms and conditions and Disclosure and Authorization Agreement being accepted by the account holder will be pended and unavailable to the account holder until they log in to the Health Payment Online Portal and accept these agreements. In the event that the online terms and conditions and disclosure and authorization agreement are accepted in a month following the employee s enrollment into the HSA-qualified health plan enrollment unit/subgroup associated with the HSA administered through Kaiser Permanente, the monthly administrative fees would be retroactively billed back to the month of the employee s initial enrollment into the health plan. See Enrollment structure and Monthly administrative fee. HSA contribution file submission HSA contributions made via payroll withholdings or by the employer are submitted via a contribution file provided to Kaiser Permanente Health Payment Services by the employer or its designee. The contribution file indicates the applicable employees/ contribution amounts for any specific period, typically tied to the employer s payroll schedule; however, the schedule can be customized by the employer or a third-party administrator (TPA). Contribution file provider: Employer group Third-party administrator (TPA) 3
Contribution file type: The contribution file is sent in one of the following formats. The appropriate format will be determined during onboarding. CSV file format: This file is uploaded to the Employer Administration Portal. SFTP: Available to employer groups with 200 or more employees. This file is uploaded to a Secure File Transfer Protocol (SFTP) site that would be provided to the employer during onboarding. Wellness contributions Employer HSA contributions made as a result of an employee completing wellness activities are submitted via a separate contribution file provided to Kaiser Permanente Health Payment Services. The contribution file indicates the applicable contribution amounts for any specific period. Contribution file provider: The wellness contribution file can be sent by any of the following parties: Employer group Kaiser Permanente HealthWorks Wellness administrator Third-party administrator (TPA) Contribution file type: The wellness contribution file can be sent in the following formats. The appropriate format will be determined during onboarding. CSV file format: This file is uploaded to the Employer Administration Portal. SFTP: Available to employer groups with 200 or more employees. This file is uploaded to a Secure File Transfer Protocol (SFTP) site that would be provided to the employer during onboarding. Employer reporting The report below is available to all Kaiser Permanente employer groups via the Employer Administration Portal. Access to this report will be discussed during onboarding. HSA Account Detail Report The HSA Account Detail Report provides an overview of each consumer s HSA along with individual payroll deduction and employer contribution detail at a tax-year or year-to-date level. If additional reports or reporting data are needed, employers can contact Kaiser Permanente Health Payment Services to submit a request. 4
Onboarding Time frame: Once an employer has decided to select the HSA administered through Kaiser Permanente, they will move into the onboarding phase. During the onboarding phase, the employer will be provided with the required forms and agreements to sign and will be guided on where and how to send eligibility and contribution files for the HSA. Provided all onboarding steps required of the employer are completed on schedule, the process can be expected to take 20 business days from the date forms and agreements are returned to Kaiser Permanente to the date when account holders will receive welcome letters and Health Payment Cards. Employers with a January 1 effective date should anticipate a time frame of 45 business days. Required forms: Administrative Services Agreement for Employment-Related Financial Account Programs Administration and Recordkeeping Services for Health Savings Accounts (HSAs) Administrative Fees Applicable to Health Savings Accounts (HSAs) ACH form HSA balance transfer/rollover Employees with an existing HSA who wish to transfer or roll over their existing HSA balance to their new HSA administered through Kaiser Permanente will be provided with the Direct Rollover/Transfer Form, which will provide instructions on completing this process. This form can be distributed by the employer, requested from Kaiser Permanente Health Payment Services, or downloaded by account holders on the Health Payment Online Portal. Account holder fund access Point-of-care payment options: All account holders will receive a Kaiser Permanente Health Payment Card. This debit card is the most convenient method of accessing HSA funds. Account holders are responsible for confirming that funds from the HSA are used for qualified medical expenses. Pay out of pocket. Account holders have the option of requesting distributions from their HSA for out-of-pocket expenses using the electronic or paper reimbursement options below. 5
Electronic reimbursement If an account holder pays out of pocket for qualified expenses and wants to be reimbursed by their HSA, the Health Payment Online Portal is available to all account holders whether or not they have single sign-on (SSO) access to kp.org. Paper reimbursement If an account holder pays out of pocket for qualified expenses and wants to be reimbursed by their HSA, they can access the HSA Distribution Request Form from the Health Payment Online Portal and can submit requests via fax/mail/email. Account holder investment options When the average daily account balance in an account holder s HSA reaches, and is maintained at, $2,000 for any month, the account holder will be eligible to invest amounts above their $2,000 balance into their choice of available mutual funds. Funds above the $2,000 balance can be set to automatically sweep into the account holder s mutual fund selection(s). Account holders can manage their investment account(s) via SSO through kp.org or kp.org/healthpayment. An annual investment fee of 0.25 percent will be debited from the HSA by HealthcareBank quarterly on the current balance amount of the account holder s investment account(s). As with all investments, mutual funds involve risk. Investments are not FDIC insured and may lose value. HealthcareBank acts solely as custodian, with any mutual funds being offered and sold through a registered broker-dealer by prospectus only. Employee account activation and online account management Employees electing an HSA administered through Kaiser Permanente will be required to log in to their account online in order to activate their HSA before any contributions can be posted to the account. Activation includes the online acceptance of our HSA terms and conditions as well as electronically signing our HSA Disclosure and Authorization Agreement, which allows us to share their personal information for the purposes of administering the health savings account. Employees enrolled into the opt-in enrollment unit/subgroup (see: Enrollment structure) will receive a Kaiser Permanente Health Payment Card, which will include a notice advising them to activate their Health Payment Card and log in to kp.org/healthpayment, where they can accept the terms and conditions and Disclosure and Authorization Agreement. They will also receive a welcome letter reminding them to log in to their account online. Employees will have multiple support resources available to them, including the Health Payment Online Portal, the KP HRA/HSA/FSA Balance Tracker app for ios and Android devices, 24/7 access to a bilingual IVR phone line where they can check their account balance, and the support of a dedicated team of specialists at Kaiser 6
Permanente Health Payment Services. Kaiser Permanente can also provide FAQs specific to the health plan and the health savings account, a Health Payment Online Portal user guide, and online tools to help employees understand and use both their health plan and their HSA. Employees whose Kaiser Permanente health plan coverage terminates Employees with an active HSA administered through Kaiser Permanente who terminate from the employer-sponsored HSA-qualified plan can maintain their HSA; however, their method of accessing their account online will change, as may the payer of the monthly administrative fee. Health Payment Account online access: Employees terminating from the employer-sponsored Kaiser Permanente HSA-qualified plan associated with the HSA administered through Kaiser Permanente will lose SSO access to their Health Payment Account and investment account, if applicable, via kp.org and kp.org/healthpayment. However, their account(s) can still be accessed via kp.org/healthexpense, where a new username and password will need to be created. Should the employer choose to extend HSA eligibility to COBRA participants, SSO access would remain available for the duration of the terminated employee s COBRA participation. Administrative fee: For employers who choose to pay the administrative fee for the HSA administered through Kaiser Permanente, employees whose coverage under the Kaiser Permanente HSA-qualified plan terminates will have the administrative fee defaulted to be pulled from their HSA account balance on a monthly basis following the month of their termination from the employer-sponsored HSA-qualified plan associated with the HSA administered through Kaiser Permanente. Should the employer choose to extend HSA eligibility to COBRA participants, the employer would continue to be billed the monthly administrative fee for the duration of the terminated employee s COBRA participation. 7 Business Marketing 60287811 December 2014