HSA contributions where employer contribution is prorated

kristen-rotzenberg

We will have an HSA for the first time for 2024.  There will be employer contributions, which we want to provide in one lump sum versus split over remaining pay periods.  Has anyone accomplished that?  My work-around is to have the team change the amount on the employer deduction to the full amount so it comes out the first check and then decsending balance would be updated to $0.  However, hoping to not have to do this manually.

The bigger issue we are trying to solve is the fact that they want to prorate the employer contribution for new hires that come on in the middle of the year.  For single, the employer contribution is $400.  This would make the limit for the employee contribution $3750.  If the employee is hired in June and only receives $200 employer contributions, they should be able to elect up to $3,950 themselves.  In our testing, the system is still capping them at $3,750.  Has anyone figured out how to make that work?

unknown

Administration of HSAs can certainly be challenging. I can explain what we do, but you may need to adapt depending on what type of customer you are. We are Single-Tenant GHR/Benefits with S3 Payroll customer. 

1. Descending Balances -

We have a rather complex SQL script that calculates descending balance for all HSA plans. This runs every Monday prior to payroll processing.

It considers Federal Maxium based on Coverage Type and Age, YTD Contributions, and Reamining Employer Contributions. Employer contribution types and amounts differ for our different union groups. Most of our groups receive a lump sum contribution like you are describing. Some of our groups receive a percentage match of Employee Contributions up to a certain threshold (for these folks we also have a job that calculatiosn and updates the Employer deduction's descending balance).

The SQL Script also considers Coverage Tier Changes and updates the descending balances accordingly. For example, the Federal Maximum for somebody that goes from Family to Single mid-year is prorated based on the number of months with each coverage type. Single to Family is simpler as they can just contribute the full Family max. 

The SQL scripts are executed in IPA. The data is then read and Landmark Transactions are used to update the Descending Balances in GHR. We then interface the balances to S3 using the delivered decution interface. 

Unfortunatley Descending Balances are not sent back from S3 after Payroll is run in the delivered BenefitDeductionAmountImport job. I can't remember if we ever raised this as an issue with Infor Support. It's also possible we are missing something.

Either way, we would need a simlar custom job regardless since Life Events reset descending balances in GHR. 

2. Prorated Front Load

We have a SQL query that calculates Front Loads for new hires, no coverage to coverage Life Events, and Single to Family Coverage Tier Changes. 

Similar to you, we prorate based on benefit start date and the front load amount differs between Union Groups. That's all accounted for in the query. 

The query is executed in IPA. The data is read and the deduction code is then Added or Changed in S3 using a Lawson Transaction node.

If you are a mult-tenant client, you will likely need adapt to a different strategy based on the tech stack available to you. Direct database access and the SQL node in IPA aren't available in MT. In that regard, I'm curious to hear from others in the community. That's one thing that holds us back from making the change to MT - how do we replicate complex SQL scripts and calculations like these using Infor's MT tech stack? APIs only go so far. Landmark Transactions aren't good for complex data sets. Perhaps it can be done using Data Lake, but I'm not sure how it can be used in IPA. Maybe there are other options.as well. Interested to hear from the community on that one.

If you are on Landmark Payroll, that may also change your challenges and therefore strategy a bit as well. I can't speak to that. 

Hope that helps. I would be willing to share our code and IPAs with you if interested, just let me know.