TOM GALLAGHER
CHIEF FINANCIAL OFFICER
STATE OF FLORIDA
June 20, 2006
IN REPLY REFER TO:
DFSBP 06-02
TO:
Agencies Addressed
FROM:
John Bennett, Chief
Bureau of State Payrolls
SUBJECT:
Implementation of Health Savings Account (HSA) Reversals
The purpose of this memorandum is to provide payroll-processing details of Health Savings Account
(HSA) reversals from a Bureau of State Payrolls (BOSP) perspective.
HSA reversals will only arise when an employee has enrolled to have an HSA, but failed to sign the hard
copy document required by federal banking regulations when a person opens a new bank account. When
this occurs, all applicable employee and employer HSA activity for the employee must be reversed.
BOSP intends to implement its role for handling HSA reversals during the nightly processing for the
supplemental payroll we will run on July 11, 2006 (warrant dated July 17, 2006).
PAYROLL INPUT:
People First will submit, directly to BOSP, files containing HSA reversal information for all state
agencies. Agencies will have no responsibilities for input to BOSP for HSA reversals.
PAYROLL PROCESSING:
BOSP’s processing of HSA reversals will be shared between BOSP’s daily adjustment system and
BOSP’s systems for processing biweekly, monthly and supplemental payrolls. All aspects of an HSA
reversal transaction will be processed in the same night’s nightly processing.
a. BOSP’s daily adjustment system will reverse the HSA’s impact upon the employee’s year-to-date
balances as applicable:
The original payroll transaction’s value for code 0918, Health Savings Account Employer
Contribution, will be zeroed out and this value recorded under code 0917, High Deductible
State Health Employer Contribution. No money will be returned to the applicable employing
agencies because the total employer premium contribution is correct. The only needed
correction is associated with how the total employer premium contribution was originally
classified between codes 0918 and 0917.
JOHN BENNETT, BUREAU CHIEF
BUREAU OF STATE PAYROLLS
200 EAST GAINES STREET ● TALLAHASSEE, FLORIDA 32399-0356 ● TEL. 850-413-5513 ● FAX 850-413-5552 ● sc 293-5513
EMAIL: JOHN.BENNETT@FLDFS.COM
AFFIRMATIVE ACTION/EQUAL OPPORTUNITY EMPLOYER
Agency Addressed
June 20, 2006
Page 2
If the original payroll transaction had a deduction for code 0067, Pre-tax Benefit (PTB)
Health Savings Account-Employee, the value for code 0067 will be zeroed out.
When the original payroll transaction was issued in a prior calendar year, a W-2c (corrected
W-2) will be prepared.
b. When the original payroll transaction had a code 0067, PTB Health Savings Account- Employee
deduction, an employee payment will be issued for the HSA reversal via the next available
biweekly, monthly or supplemental payroll:
A separate employee HSA reversal payment will be issued for each of the employee’s
applicable HSA deductions. The gross amount of each payment will be the value of the code
0067, PTB Health Savings Account-Employee deduction in the applicable original payroll
transaction.
o
The appropriate trust fund of the Division of State Group Insurance (DSGI) will be
charged for all aspects of employee HSA reversal payments.
o
The employing agency’s OLO cited in the original payroll transaction will be used
for routing possible employee warrants and/or paper earnings statements for HSA
reversals, as applicable.
If the original payroll transaction was issued in the current calendar year, the appropriate
employee deduction amounts will be taken for the following as applicable:
o
o
o
Federal income tax
Social Security tax
Medicare tax
If the original payroll transaction was issued in a prior calendar year, the appropriate
employee deduction amounts will be taken for the following as applicable:
o
o
Social Security tax
Medicare tax
Regardless of the calendar year of issuance of the original payroll transaction, the appropriate
employer contribution amounts will be addressed for the following, as applicable:
o
o
Social Security tax
Medicare tax
PAYROLL OUTPUT:
a. If the employee is properly set up to receive payroll payments via EFT (direct deposit), the net
HSA reversal payments will be issued via EFT. Otherwise paper warrants will be issued.
Agency Addressed
June 20, 2006
Page 3
b. BOSP will use the following earnings codes when issuing employee payments for HSA reversals:
o
Code 9501, HEALTH SAVINGS ACCT REVERSAL, will be used when the original
payroll transaction was issued in the current calendar year.
o
Code 9503, HEALTH SAVINGS ACCT REVERSAL PY, will be used when the
original payroll transaction was issued in a prior calendar year.
o
The value for codes 9501 or 9503 will equal the value of code 0067 deduction in the
original applicable payroll transaction.
c. The employee’s applicable calendar year’s year-to-date balances will be updated for the
following, as applicable:
o
Codes 9501 and 9503
o
Deductions for federal taxes
o
Employer contributions for federal taxes
o
When the original payroll transaction was issued in a prior calendar year, a W-2c
(corrected W-2) will be prepared.
d. BOSP’s last payment screens, various output reports, files and registers will cite information
related to HSA reversals. One of these files is the agency payroll data file (File 0013).
Employing agencies should take steps to prevent HSA reversals from being posted to their
agency’s FLAIR Departmental Accounting. This is because the appropriate trust fund of the
DSGI will be charged for all aspects of employee HSA reversal payments.
We will issue a future communication regarding refunds associated with High Deductible Health Plan
(HDHP) contributions and/or Health Savings Account (HSA) contributions arising from circumstances
not related to HSA reversals.
Please contact Marvin Naiman at (850) 413-5431, Suncom 293-5431, marvin.naiman@fldfs.com or
Ernest Thompson at (850) 413-5676, ernest.thompson@fldfs.com if you have any questions.
Sincerely,
John Bennett
JB:MN/sd