Steps to Add a PayeeBelow are the instructions for setting up deductions for a health savings account for employees in the School Accounting System. The health savings account deductions can be set up two different ways, depending on whether or not direct deposit is set up in Payroll. With both methods, contributions made by an employee to a heath savings account can be set up as a pre-tax deduction (similar to how Flex 125 Cafeteria Compensation deductions are set up).
Method 1: Health Savings Account Deductions Setup for Payments by Check
Add a separate payee for each bank, credit union, insurance company, or other entity approved by the IRS, where employees have their health savings accounts.
Add a separate health savings account deduction (using Deduction as the Deduction Type) for each different payee created in the previous step.
Tip: If there is a maximum amount that can be contributed to the health savings account in a calendar year, click the Rate Table tab when setting up the deduction, enter the maximum amount in the Deduction Upper Limit field for Calendar Year, and select the appropriate type in the Deduction Limit Type field (for example, select Employee or Employer, depending on who pays the deduction).
Set up the appropriate health savings account deduction on the Deductions screen in the Employee File for each applicable employee.
Steps
to Complete the Deductions Screen in the Employee File
During a Payroll check cycle, checks will be issued to the various payees for the health savings account deductions.
Method 2: Health Savings Account Deductions Setup for Payments by Direct Deposit
Note: Direct deposit must be setup in Payroll in order to utilize Method 2. If direct deposit is not setup in Payroll, complete the Payroll Direct Deposit Setup Checklist at this time.
Payroll
Direct Deposit Setup Checklist
Add one health savings account deduction in the Deduction File, specifying the Deduction Type as Individual Bank Account Deduction.
Tip: If there is a maximum amount that can be contributed to the health savings account in a calendar year, click the Rate Table tab when setting up the deduction, enter the maximum amount in the Deduction Upper Limit field for Calendar Year, and select the appropriate type in the Deduction Limit Type field (for example, select Employee or Employer, depending on who pays the deduction).
Set up the health savings account deduction on the Deductions screen in the Employee File for each applicable employee, being sure to enter the account number for the employee's health savings account and corresponding bank information in the Individual Bank Account Deduction section.
Steps
to Complete the Deductions Screen in the Employee File
During a Payroll check cycle, separate direct deposit stubs will print for each of the employees set up with the health savings account deduction, showing the amount withheld and/or expensed for the deposit to the health savings account. The entries for the health savings account deposits will also be included on the direct deposit file.
Note: The first time a payroll is calculated for an employee set up with the health savings account deduction, the system adds the employee as a payee, with Summary by Deduction specified as the Stub Printing Preference (the Entity Roles for the employee are updated to include Payee).