On May 1, 2011, The ACS|BNY Mellon HSA Solution “The HSA Solution” will offer a way for account holders to create and send one-time or recurring payments from their HSA ─ on demand ─ in five easy steps. 

Below we have put together a few of the Frequently Asked Questions (FAQs) regarding our Direct Pay HSA service:

How will account holders access the new Direct Pay HSA functionality?  

Account holders will be able to click on a “Direct Pay HSA” tab along the top navigation bar from their ACS|BNY Mellon HSA Solution Account Summary page; then click on “Access Direct Pay HSA”.

What are the necessary steps to create a payment request?

There are five basic steps to creating a payment online using Direct Pay HSA:

• Step #1: Click on the “Direct Pay HSA” tab from the Account Summary page
• Step #2: Click on “Access Direct Pay HSA”
• Step #3: Select “New Transaction” on the Direct Pay HSA home page
• Step #4: Click on “Send a Payment” and complete the payment information
• Step #5: Review and “Submit” the payment request for processing

What information will account holders need to know in order to create a payment using Direct Pay HSA?

• Payment amount
• Issue date
• Payee’s name
• Payee’s address including street address, city, state and ZIP code

Is there a charge to the account holder for creating a payment online using Direct Pay HSA?

Account holders do not incur transaction or postage fees with any payments they create using Direct Pay HSA.

What if I have additional questions?

The following training materials will be located on the “Direct Pay HSA” tab:

• Direct Pay HSA Frequently Asked Questions (FAQs)
• Direct Pay HSA flyer
• Direct Pay HSA online educational video

We thank you for your business and the opportunity to serve you!

The ACS|BNY Mellon HSA Solution

[Information Source] [Email Blast to Health Plans]

The following information is from Banyan Administrators:

Health Care Reform W2 Reporting

What You Need to Know Now About: W-2 Reporting

On March 31, 2011, the Internal Revenue Service (IRS) released the 19-page Interim Final Rules on the Health Care Reform W-2 reporting requirements. The IRS is still taking comments on the rules for the next 60 days. 

1.       What needs to be reported on the W-2 form?

Employers must report the costs for a group health plan. This does not include dental and vision plans unless the plans are integrated in the group health plan. Disability and long term care plans are also excluded from the reporting requirement.

2.       How do I determine the cost for the group health plan?

The cost includes both the employee contribution and employer contribution. Employers with fully-insured health plans should use the monthly premium rate. Employers with self-funded health plans should use the COBRA premium equivalent rates less the 2% administrative fee. Employer contributions into Medical Savings Accounts (MSA), Health Savings Accounts (HSA), Health Reimbursement Accounts (HRA) and, in most instances, Flexible Spending Accounts (FSA) are excluded.

3.       Where do I enter this information on the W-2 Form?

The information is entered in Box 12 on the W-2 form using code DD.

4.       Will the amount be included as taxable income for my employee?

No it will not. The first page, first bullet of the IRS Interim Final Rules state, “This reporting to employees is for their information only, to inform them of the cost of their health care coverage, and does not cause excludable employer-provided health care coverage to become taxable.”

5.       When do I have to be ready to comply with the new W-2 reporting requirement?

If you issue more than 250 W-2 forms for tax year 2011, you are required to comply with the new requirement for the 2012 tax year W-2 forms that are distributed to employees in January, 2013. You do have the option to comply earlier, if desired. However, remember that a terminating employee in calendar year 2012 can ask for an early W-2 so, in reality, you will need to be ready to comply as early as January, 2012.

Employers that issue 250 or fewer W-2 forms for tax year 2011 can receive “transition relief” from this requirement until January, 2014.

If you have any questions on this health care reform provision, please discuss with a member of your Banyan Consulting team.

[Information Source]

Protect our environment, go paperless. At ACS|BNY Mellon HSA Solution, we would like to do our part to protect the environment by reducing the amount of printed material we generate.

 If you are not already viewing your periodic HSA statement online; please “turn paper off” by following the four steps outlined below:

 Logon to your HSA Web site

• Select “Update Account Profile” on the left side of the screen
• Click on “Edit” under “Your Statement Delivery Option”
• Click on “Agree” to acknowledge and accept the terms

Beginning in September, any account holder receiving a paper HSA statement will be charged $0.75 each time one is generated.

A customer service enhancement for our account holders. Effective July 19, 2010, you will be able to log on to your HSA Web site or call the HSA Solution Contact Center and update your personal data (i.e., residential address, mailing address, e-mail address, and phone number). We will no longer accept personal data changes from another source.  We have changed the process to allow for direct owner­ship of personal information by the account owner.

HSA limits stay the same for 2011. For calendar year 2011, the maximum HSA contribution that can be made is $3,050 for employee-only coverage ($4,050 if you are age 55 or older and eligible to make catch-up contributions) and $6,150 for family coverage ($7,150 if you are age 55 or older and eligible to make catch-up contributions). The minimum deductible will stay at $1,200 for single coverage and $2,400 for family coverage. The maximum out-of-pocket employee expense, including deductibles, will stay at $5,950 for single coverage and $11,900 for family coverage. (IRS, 5/24/10)

Health care reform and HSAs. Outlined below are the health care reform changes with the most immediate impact on Health Savings Accounts:

• Amounts paid for over-the-counter drugs will no longer be qualified medical expenses eligible for reimbursement from an HAS unless the over-the-counter drug was prescribed by a doctor.  The prescription requirement only applies to over-the-counter drugs.     It does not apply to expenses for other over-the-counter items such as insulin and diabetic supplies, bandages, band-aids or contact lens supplies.  These items continue to be reimbursable from an HSA without a doctor’s prescription.  (Effective 1/1/2011)
• The penalty for reimbursements of nonqualified medical expenses from your HSA will increase from 10 to 20 percent. (Effective 1/1/2011)

NOTE: Do you have a dependent that is between the ages of 23 and 26? Parents who cover adult children via their employer’s high-deductible health plan option may be unable to use HSA funds to reimburse themselves on a tax-free basis for medical expenses incurred by those adult children.

Employer Eligibility
ProtectPlus is available to accounting firms and firms offering general financial services. Solo practitioners (a CPA practicing on his/her own with no other employees) are eligible to apply.

To be eligible and retain such eligibility, more than 50% of all the Employer’s owners (i.e., principals, proprietors, partners, shareholders or other owners) must be CPAs or Associate members of CalCPA in good standing.

If you are a CPA and not a member of CalCPA, see how you can join CalCPA here.

All employers deemed to be part of an affiliated group under Internal Revenue Code Sections 414 (b), (c), or (m) are considered to be a single employer.

Employee Eligibility
Active, regular full-time solo practitioners working at least 20 hours per week are eligible for coverage.

Dependent Eligibility
Eligible dependents include a lawful spouse, domestic partner, and unmarried children, up to age 19, or through age 24 if the child is an unmarried, full-time student carrying nine or more credit hours per semester. Disabled children of eligible employees who, with appropriate medical certification, are eligible for coverage at any age. Children of domestic partners are eligible. Non-student dependent children, ages 19 through 24, are eligible but must be covered at employee rates.

Learn More

CalCPA ProtectPlus Copay Plans

CalCPA ProtectPlus HSA Plans

Tax-Savings Can Really Add Up To Lower Healthcare Costs

Times are tough. Medical costs are on the rise. But there’s something you can do right now to get more for your healthcare dollars. Simply sign up for a CalCPA ProtectPlus Health Savings Account (HSA) plan and save big on the services you already use. HSA plans are available to any CalCPA ProtectPlus member whose employer is offering any of our three High Deductible Health Plans (HDHP).

With these accounts, you deposit pre-tax dollars into your Health Savings Account and then use your HSA debit card to pay for eligible medical expenses for you and your dependents. You can use your HSA for expenses like office visits, prescriptions, and emergency services, plus eligible expenses NOT covered by your plan such as dental, vision, many over-the-counter drugs and long-term care.

Get full details on HSA plans. See HSA eligible plans.

Meanwhile, the popularity of HSAs and their associated high deductible HSA eligible health plans continues to grow rapidly. Between January 2008 and January 2009, the number of people covered by such plans increased 31 percent to eight million. California led all other states with 854,000 enrollees.

ACS Announces ACS|Mellon HSA Solution Interest Rate Adjustment

The current economic climate and continued downward pressure on interest rates have made it necessary to decrease the interest rate we pay HSA account holders on the demand deposit checking account.

Effective July 1, 2009, the interest rate paid on our standard HSA product will be (APY) 0.100%.

While the reality of the current economic climate requires this action, we will continue to closely monitor interest rates and make responsive adjustments to our product.

This interest rate change will be reflected on the July HSA statements sent to all ACS|Mellon HSA Solution account holders in early August.

Responding to the growing popularity of Health Savings Account eligible medical insurance plans (commonly referred to as HSAs), the Group Insurance Trust (CPA ProtectPlus) has expanded its current offerings with a third such plan, Protect HSA $2,500.

With premiums approaching the lower end of ProtectPlus co-pay plans, the new plan offers significantly greater benefits than the two already established Protect HSA plans.

As with all HSA-eligible plans, Protect HSA$2,500 features a high annual deductible that must be satisfied before benefits are paid by the plan. For the new plan the deductible is $2,500 per individual and $5,000 per family.

Though not greatly different from HSA $2,850 in respect to the deductible, the difference in benefits is large indeed.

After the deductible is met HSA $2,500 provides 100 percent coverage for all in-network office visits, professional services, emergency and in-patient hospitalization, hospital and outpatient surgery, lab costs and more.

It also pays 70 percent of the negotiated fee for all these services when provided out-of-network. In contrast, HSA $1,500 and $2,850 pay 70 percent of negotiated fees for in-network services and 50 percent of negotiated fees out-of-network.

Those considering an HSA eligible plan should keep in mind some important facts about how these plans work. First, annual deductibles and out-of-pocket maximums are applied somewhat differently in most HSA eligible plans than they are in traditional copay plans. Most copay plans “embed” the individual deductible within the family deductible.

This allows one family member to meet his/her deductible or out-of-pocket maximum before the entire family deductible or out-of-pocket maximum is met. However, most HSAs do not embed individual deductibles or out-of-pocket maximums within the family deductible and out-of-pocket maximum amounts. This is done in part because of the regulations governing HSAs and in part to reduce premium costs. As a result, for HSA subscribers covering family members, the entire family deductible and out-of-pocket maximum must be met before any family member’s deductible or out-of-pocket maximum is considered met.

It’s important to be clear about the two elements involved in HSAs that are commonly confused. This confusion stems in large part from the misleading, generic use of the term HSA.

The principle to keep in mind is that the law granting HSA tax benefits intends for subscribers to combine a high-deductible health plan (HDHP, but also called an HSA eligible plan) with a tax-exempt trust or custodial account through a financial institution. The latter is the “health savings account” that gives the entire program its name.

There are now many institutions that have HSA trustee account programs, and ProtectPlus HSA subscribers are free to use the financial institution of their choice. However, as a convenience, the Trust provides access to Health Savings Accounts through Bank of New York Mellon, US Bank, and, most recently, Alliant Credit Union. For more information regarding ProtectPlus HSA plans and Health Savings Account program visit CPA ProtectPlus, or simply compare HSA Plans here.

Also See “HSA Factors To Consider (Part 1 & 2)” for more information.

1. You can’t open an HSA without subscribing to a high deductible healthcare plan (HDHP), but you can subscribe to an HDHP without opening an HSA.

2.Before deciding on an institution to act as trustee or custodian, research your investment options and the account fees.

3. As an employee, when comparing an HDHP with traditional copay plans, consider the amount your employer will contribute to your HSA.

4. Those over 65 who qualify for Medicare may not open an HSA, but there are several incentives for those in their 50s or early 60s to at least consider an HDHP/HSA option.

While,  for instance, there are limits on the amount of tax-deductible contributions that can be made to an HSA in any year, those over 55 may also make specified “catch up” contributions. Once you turn 65 and are covered by Medicare you may no longer make contributions, but you can continue to draw from your account tax-free for out-of-pocket health expenses.

In addition, you can use your account to pay Medicare premiums, deductibles, copays, and coinsurance under any part of Medicare. If you have retiree health benefits through your former employer, you can also use your account to pay for your share of retiree medical insurance premiums. You can also use your account to pay long-term care premiums, though you may not use HSA funds to purchase a “Medigap” policy.

5. California has recently extended state tax deductions to parallel federal exemptions.

This means that employee contributions to HSAs, and distributions made from these accounts to pay for medical-related expenses, are California income tax deductible. In addition,employer contributions will not be added to an employee’s California taxable income.

6. Finally, a word of caution for those who are shopping for an HDHP policy: while a policy may be attractive for its low premiums, be sure that it comes with a good preferred provider network.

If not, you can be hit with large bills for routine medical procedures, and because of the high deductibles, your out-of-pocket expenses can be very high indeed. In such instances, the advantages ofan HSA may evaporate.