Issue/Symptom/Question

I have a question on setting up the HSA limit amounts in the HSA Master Deduction File.

2019 Individual Limit = $3500
2019 Family Limit = $7000

Our employer gives us $1,250 into our HSA account.
How do I set this up?

Applies To

• Master Deduction Information
• Master Reimbursement Information
• Employee Deduction Information
• Employee Reimbursement Information

Resolution/Fix/Answer

To set this up,

• set up the *employee*s' Master Deduction information, with the full annual limit identified (3500/7000)
• set up the employer's portion as a combined deduction/reimbursement entry, setting up both a deduction and a reimbursement with the same amount or percent to offset each other and net to zero. 
• If the employer contribution is taxable, set up the reimbursement as before tax, and the matching deduction as after tax, so the taxable amount is included on the W2 earnings, but there is no actual income impact.  
• When setting the reimbursement up, enter the employer match deduction number in the Deduction field to link them
• Once both deductions are set up, query the employee deduction, and enter the employer deduction number as the shared deduction number on the Shared Deductions tab.  

Example:

The calculation of the employee deduction amount to be taken each period would use $2250 as the annual amount ($3500 - $1250), divided by the number of pay periods in the year (in this case, it would be $43.27 per period) even though the Annual Limit amount will be the full $3500.  
  This should be set up as taxable per requirements

The calculation of the employer deduction's per period amount will use $1250 as the basis ($3500 - $2250) divided by the number of periods ($24.04 per period)
  This should be set up as after tax
The calculation of the employer reimbursement amount will be the same, with the preceding deduction entered here.
  This should be set up as before tax

Set up the Master Deduction for the employee's portion:

Set up the employer deduction::

Set up the employer reimbursement linked to the employer deduction:

 Query the employee deduction, and enter the employer deduction number in the Shared Limit Deduction tab:

Then assign these deductions and reimbursement to the employees participating in the HSA program, enter and process payroll and verify that the results are as you expect them to be.