HSA Remittance to the employee bank acct

[Former Member]

We are setting up HSA (Health Spending Account) plans for the first time. The plans have been configured and everything seems to be working, but we have a question as to how the money deducted from each employee gets into his HSA bank account. We had thought we would set up the bank account and deduction amount on an infotype 9, but this merely splits his net amount instead of transferring the actual deducted HSA amt from the wage type.

How are other companies remitting HSA into the various bank accounts?

Thru 3rd party? (If so, how does the bank know how much money to put in which account?)

Or does HSA get remitted via an actual ACH file, like the net payments? (If so, what's the process--RFFOUS_T or a custom exit?)

Thanks for your help!

[ted_dinh · Accepted solution]

HSA account is usually handled by a 3rd party vendor (e..g. we use Fidelity), and managed by the employees themselves (i.e. they can log on to their HSA account to do investment with the money they have, or contribute after-tax money (outside of payroll deduction) ).

HSA amount deducted from ees through payroll deduction will be sent to 3rd party vendor either by setting remittance rule (automatically remit to vendor) or custom interface (i.e. extract HSA amounts from payroll and send to vendor).

[Former Member]

Hi Sharon,

I had this same requirement and I set up a bank type on IT0009 and modified rule X050 to use the amount in the HSA wage type and transfer it to the account - so that much is possible with configuration. For the ACH file you do need a special identifier in the bank control key that spcifies an HSA account, the client was using a custom version of RFFOUS_T so it was added by a developer.

Good luck,

Karen

[Former Member]

This is also a recent requirement of ours...........we are introducing an HSA in our company. It needs to be a payroll deduction and we would like to send it in the same ACH with the 'net pay' - - and have the banks process and dispurse the money to the appropriate accounts.

My original idea was to add another sub-type to IT0009 with each employee's HSA bank account number - - process payroll - - have amounts in the correct wagetypes and create an ACH with the correct amount splits to the correct account #s.

I was looking at rule X050, and trying to figure out how to change it to accomplish what I want, but haven't figured it out.

I have been doing a lot of research on 'how' to accomplish this, but until this thread I haven't found much.

I don't know how to add a new sub-type in IT0009 and map it to the HSA wagetype - - mapping the amount to the bank account.

Does anyone have any helpful information or details that could help me accomplish what my company needs?

I would really appreciate any help, for this process is needed soon.

Thanks in advance,

Carey

[Former Member]

Our original approach was to set up a new IT-9 subtype for HSA, but that didn't work (the amt did not get on the ACH file). We then used subtype 1 (other bank) on IT-9 with the HSA amt. That worked for the employer contribution (since it was a payment) but the employee deduction from the IT-169 savings plan wound up being deducted twice (since this was just a split of net pay). That's when we changed to use IT-11 and it has been working for us. Our benefits administration company does not see a problem with doing it that way.

[Former Member]

Thought I would update how we ultimately handled this. We set up an infotype 11 (External Transfer) for each employee who has an HSA account, to contain EE and ER contributions. The IT-11 has the specific employee's bank account, and directs that 100% of the HSA wage type goes to this transfer. We put the employee name in the "Payee Text" field on IT-11. The contribution is now sent on our ACH file along with the normal net pay. Hope this helps someone else!

[ted_dinh]

My understand is HSA would need to be managed by a "Qualify HSA Trustee or Custodian". If you wired HSA contribution directly to the ees' accounts, I'm not sure if it's allowed by IRS; you may want to check on this further.

Moreover, since you have HSA contribution from infotype other than IT0169, you'll need to have custom logic to control HSA contrib limit rather standard SAP logic to handle that for you.

[Former Member]

One more point - after re-reading your post. You might need to create a new, custom bank type in IT0009 and then have the HSA amounts hit WT/559 and the correct split type to reference your custom bank type. Again in theory it might be do-able, although that adds some complexity. The exit program ZHRE004FU is pretty powerful and flexible and might get you what you need.

Jay

[Former Member]

Hi Sharon,

You have an interesting question - a requirement I haven't seen before. I assume you're using IT0172? I'm not aware of functionality where SAP has taken the next step, and allow customers to pay out the approved claims. However, in theory you could probably write a custom payroll function or operation in exit program ZHRE004FU. The operation could read IT0172 and assign approved amounts to a non-taxable wage type that you choose.

I did a quick search in SAP Help and did not see any references to paying out amounts in IT0172. It's interesting - it seems like that would a good logical next step.

Anyway, best of luck with this.

Jay Crowley