Ask your HR company to consider paying the monthly fee or changing HSA administrators. The current setup is a disincentive for employees to manage and improve their health. They need to hear it.
You are not forced to use the HSA offered through your employer. You can instead contribute to an HSA on your own. One downside is that you will lose the fica tax savings when doing this method but compare it to the fees of your current option.
We are having Bank X present this information, but you can set up your HSA anywhere you choose.
Ask your HR company to consider paying the monthly fee or changing HSA administrators. The current setup is a disincentive for employees to manage and improve their health. They need to hear it.
You are not forced to use the HSA offered through your employer. You can instead contribute to an HSA on your own. One downside is that you will lose the fica tax savings when doing this method but compare it to the fees of your current option.
No, you don't lose the FICA tax savings as long as you make those contributions through payroll, your employer knows that those contributions direct deposited to bank X are for your HSA, and your employer categorizes them correctly in payroll.
QuoteWe are having Bank X present this information, but you can set up your HSA anywhere you choose.
So when you do your taxes, you'll check a box that says you contributed to an hsa, but that it wasn't through payroll, so you can get your taxes back?
I'm trying to figure this one out too. My last company switched from Benefit Wallet to HealthEquity mid year. It took me six months to find the right forms to close the BW account. I just started at a new company, and their HSA is BW. Argh!
Employment taxes. Amounts you contribute to your employees' HSAs are generally not subject to employment taxes. You must report the contributions in box 12 of the Form W-2 you file for each employee. This includes the amounts the employee elected to contribute through a cafeteria plan. Enter code “W” in box 12.
Unfortunately, the IRS will not refund Social Security and Medicare taxes paid on income that is used to make after-tax contributions to a Health Saving Account. The law creating Health Savings Accounts only allows that qualified after-tax contributions can be exempt from income taxes. {With This Herring - So, any direct contributions you make that don't go through payroll only save you income tax. They don't save you FICA.}
Pre-tax contributions made through your employer are part of your employer’s cafeteria plan (also known as Section 125 plan). These employee benefit plans are governed under Section 125 of the Internal Revenue Code and allow employees to pay for a number of benefits with income that is exempt from federal and state income taxes, Social Security taxes, and Medicare taxes. Among the benefits that can be included are health insurance, child care expenses, and contributions to Flexible Spending Accounts and Health Savings Accounts.
Ask your HR company to consider paying the monthly fee or changing HSA administrators. The current setup is a disincentive for employees to manage and improve their health. They need to hear it.
You are not forced to use the HSA offered through your employer. You can instead contribute to an HSA on your own. One downside is that you will lose the fica tax savings when doing this method but compare it to the fees of your current option.
No, you don't lose the FICA tax savings as long as you make those contributions through payroll, your employer knows that those contributions direct deposited to bank X are for your HSA, and your employer categorizes them correctly in payroll.
This is great if your HR or payroll will do this. It's it optional or something that you can quasi force them to do?
Comparable contributions. If you decide to make contributions, you must make comparable contributions to all comparable participating employees' HSAs.
Q-25. If an employer contributes to the HSA of an employee who ceases to be an eligible individual during a year, can the employer recoup amounts that the employer contributed after the employee ceased to be an eligible individual?
A-25. No. Employers generally cannot recoup amounts from an HSA other than as discussed above in Q&A-23 and Q&A-24. See Notice 2004-50, Q&A-82.
Example. Employee N was an eligible individual on January 1, 2008. On April 1, 2008, Employee N is no longer an eligible individual because Employee N’s spouse enrolled in a general purpose health FSA that covers all family members. Employee N first realizes that he is no longer eligible on July 17, 2008, at which time Employee N informs Employer O to cease HSA contributions.
Employer O’s contributions into Employee N’s HSA between April 1, 2008 and July 17, 2008 cannot be recouped by Employer O because Employee N has a nonforfeitable interest in his HSA. Employee N is responsible for determining if the contributions exceed the maximum annual contribution limit in § 223(b), and for withdrawing the excess contribution and the income attributable to the excess contribution and including both in gross income.
Gross wages (will show on final paystub for year, but NOWHERE on W-2) | $50,000 |
EE HSA contributions | -$3,000 |
_______ | |
SS/Medi wages on W-2 (boxes 3 and 5, up to limit) | $47,000 |
401(k) EE | -$18,000 |
_______ | |
Fed/state wages for income tax purposes | $29,000 |
You can only get the income taxes back on your return, not the FICA taxes.
QuoteYou can only get the income taxes back on your return, not the FICA taxes.
Ok, I was hoping someone could tell me how to do that, since I might not go through payroll.
OP - I would contribute to the HSA regardless of the fee. Even if you're losing a small amount each month, you still will have that health safety net forever should something come up down the road (unemployment, retirement, new company doesn't have a HSA option).
To the above comments - a counterpoint from a different perspective (perhaps the OP's situation is more like this). The company for whom I work offers 3 health plans - one of which is high deductible and offers a HSA. The savings account does not carry fees, but the investments have a high expense ratio. When we enroll in health plans every year, we do not have the option to choose where the HSA is created. It is through BofA and if you don't like it, you have to choose a different health plan. We have no ability to switch, either. When the plan is elected (if you're a new plan member), the insurance company creates the HSA account for you and issues the debit card (the card does not have BofA on it anywhere). For us, the company deposits up to $2,000 into your HSA per year but other than that, the only control you have is the remaining contributions and how you choose to invest your money. Even when we leave the company (and the insurance company), the money must remain with BofA.
TL;DR There are situations where you have far less control than you would expect with HSA's
That sounds terrible. Also, the part I bolded sounds illegal, which makes me question the truth/legality of the rest of it. Is it possible HR person/whomever is in charge of this for your company either does not understand how it works or did a terrible job of explaining it?
You should be able to get the HSA money into an HSA with a different provider by rolling it. Obviously you can't just withdraw the money with no consequences without it covering medical expenses.