Managing a Health Savings Account (H.S.A.) Account (as an EMPLOYER ADMIN)
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December 4, 2024Managing a Health Savings Account (H.S.A.) Account (as an EMPLOYER ADMIN)
The feel of managing a health savings account as an employer or plan administrator is similar to when an employee requests to have their direct deposit split between 2 different bank accounts. In this situation, the 2nd account would be a health savings account with a FIXED dollar amount (you want to use fixed dollar to not go over the annual limit). If your payroll software has a “maximum amount” feature, you can utilize that as well.
The order of operations looks like this:
- Company offers an H.S.A. eligible plan (high deductible)
- Employee enrolls into H.S.A. plan
- Employee goes to a bank (online or physical) and opens up a H.S.A. checking account. This is just a regular checking account that is coded a certain way in the bank’s system.
- Employee gives H.S.A. checking account info (routing number & account number) to company admin / HR person and requests that $X be deposited into that account each pay period
- Company admin enters the request into the payroll software
- Done
Below is some information about a Health Savings Account from ChatGPT:
A Health Savings Account (HSA) is a tax-advantaged savings account designed for people with high-deductible health insurance plans (HDHPs) to save money for eligible medical expenses. Contributions to an HSA can be made by individuals, employers, or both, and they are not subject to federal income tax at the time of deposit.
