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