Business Requirements Document
SR100231 Health Savings Account
Document Information
Document Attributes
ID
Owner
Author(s)
Contributor(s)
Information
SR100231
Esther Cheung-Hill
Ken Smith
Revision History
Version
1.0
2.0
2.1
Issue Date
8/13/2013
9/9/2013
9/12/2013
2.2
2.3
9/16/2013
9/17/2013
2.4
9/20/2013
2.5
10/1/2013
2.6
10/7/2013
2.7
2.8
10/8/2013
10/23/2013
2.9
2.10
11/19/2013
11/26/2013
Changes
Very rough initial draft for resource planning.
Generally updated throughout with more detail.
Removed some details regarding employer contribution
from the requirements section (the contribution amounts
are not part of the PPS requirements). Other minor
additions here and there.
EGTN for entry of HSA deduction/contribution
Removed all requirements for California tax on the
employer contribution per resolution of items 12 and 14 of
Beth’s issue list. Added GTN Deduction Maximum to both
GTN. Removed requirement for interface to PPSIVR.
Updated a requirement that’s been discussed all along and
is in the TSD, but somehow overlooked here – no negative
contributions. Clarified “check date” to be sent to vendor
for Rush Checks. Removed one column “Account Number”
from PPS to PIN file. Other minor updates from closed
issues on the issues list.
Accepted all previous mark up. Minor corrections to GTN
numbers. Minor clarifications to vendor file process.
Added pay schedule code to internal and accounting file.
Numbered Functional Requirements for correspondence
with High Level Test Plan
Clarified R012, R013 & that OE transactions are Batch 2
Clarified 2 levels of summary on benefits accounting
report.
B. Burkart – added UPAY form.
Changed GTN priority from fixed to campus determined
Document Approvals
Role
Name
Signature
Date
Table of Contents
1
Overview ...............................................................................................................................................................5
2
Product/Solution Scope ........................................................................................................................................8
3
Business Requirements .......................................................................................................................................10
1 Overview
The following is from IRS Publication 969: A health savings account (HSA) is a tax-exempt … custodial
account that you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you
incur…A qualified HSA trustee can be a bank, an insurance company, or anyone already approved by the
IRS to be a trustee of individual retirement arrangements (IRAs) or Archer MSAs.
What are the benefits of an HSA? You may enjoy several benefits from having an HSA.
You can claim a tax deduction for contributions you, or someone other than your employer, make to
your HSA even if you do not itemize your deductions on Form 1040.
Contributions to your HSA made by your employer (including contributions made through a cafeteria
plan) may be excluded from your gross income.
The contributions remain in your account from year to year until you use them.
The interest or other earnings on the assets in the account are tax free.
Distributions may be tax free if you pay qualified medical expenses. See Qualified medical expenses,
later.
An HSA is “portable” so it stays with you if you change employers or leave the work force.
… in order to quality for an HSA …You must be covered under a high deductible health plan (HDHP)
1.1 Background
As an outcome of the annual H&W plan renewal and RFP process, UCOP Benefits Programs has decided
to offer both a HDHP (Blue Shield Health Savings Plan described in SR 83848) and an HSA.
1.2 Objectives
Offer eligible employees a Health Savings Account.
1.3 Related Projects & Dependencies
SR83848 – PPS Medical Plans 2014
1.4 Stakeholders
Acronym
*
Description
Authorize
Has ultimate signing authority for any changes to the document
R
A
Responsible
Responsible for creating this document
Accountable
Accountable for accuracy of this document (e.g. project manager)
S
Supports
Provides supporting services in the production of this document
C
Consulted
Provides input
I
Informed
Must be informed of any changes
Name
Esther Cheung-Hill
Ken Smith
Jaime Espinoza
Role
Position
*
X
R
A
S
C
I
X
X
1.5 Proposed Strategy
Acknowledging the lateness of the requirements, for January 1, 2014 implement the minimum necessary
to establish an HSA process in PPS. Afterwards, evaluate if a phase II project should enhance the design
perhaps with the addition of limits, validation, consistency checks, etc.
1.6 Glossary
Term
UCOP
HSA
HDHP
Description
University of California Office of the President
Health Savings Account.
High Deductible Health Plan
2 Product/Solution Scope
2.1 Included in Scope
2.2 Excluded from Scope
Changes to the W-2 process that will be needed for 2014 tax year, including the addition of the employer
contribution to the employee’s California Gross.
Programming to address employees resident outside California or exempt from California tax. These will
be handled manually.
Programming to reissue employer contributions for continuing employees in subsequent years.
2.3 Assumptions & Constraints
ID
Assumption / Constraint
2.4 Outstanding Items
ID
Description
According to IRS Publication 969, in order to quality for an HSA “You must be covered
under a high deductible health plan (HDHP), described later, on the first day of the
month.” Since coverage under the HDHP (Blue Shield Health Savings Plan) doesn’t
begin until January 1, 2014 what is the first check in each pay cycle where an HSA
deduction can occur? CLOSED: Requirements reflect that the compute must check the
SP coverage beginning and end dates prior to taking an HSA deduction or issuing an
HSA contribution.
Is it true that California doesn’t conform with Federal on HSA, and that the employee
deduction and employer contribution is taxable state income? CLOSED: It is true.
What about UC employees outside of California? Would we provide them a different
GTN? This item is being explored in Service Now RITM0022679. CLOSED: Employees
outside of California or exempt from California tax will be addressed manually.
What is the method for determining the amount of the employer contribution?
CLOSED: $500 for SP coverage level U, $1000 otherwise. Is it once per year or
monthly? CLOSED: Once per year in the first eligible paycheck. Do hires later in the
year receive a prorated contribution? CLOSED: Yes. If an employee has an increase in
coverage level (for example from self-only to self plus adult) mid-year is there an
additional contribution? CLOSED: No.
3 Business Requirements
PPS modifications are needed prior to the posting of Open Enrollment transactions Batch 2 and first
compute paid after January 1, 2014 (i.e. BW pay period ending 12/21/2013)
Generally, the business requirements are:
1. A payroll deduction, flat amount per month, any amount as elected by the employee
a. FWT and FICA pre-tax
b. Does not reduce California taxable earnings
c. Can be entered/updated by AYSO (Open Enrollment and New Hire)
d. Can be entered/updated from CICS
e. Employee may change at any time (prospectively)
f.
Continues indefinitely (not annual like FSA)
2. An employer contribution on behalf of employees concurrently enrolled in the “Blue Shield
Health Savings Plan” (plan code “SP”) medical plan.
a. Paid all at once in first eligible paycheck.
b. Can be entered/updated by AYSO (Open Enrollment and New Hire)
c. Can be entered/updated from CICS
d.
3. Per-pay period contributions file listing both the employee deduction and employer contribution
amounts.
4. A PIN process for consolidating the contribution file from all locations and delivering it to the
vendor as they are produced by the computes.
5.
3.1 Functional Requirements
Req ID
Requirement Type
Requirement Description
R001
CTL
New GTN 612 for employee
deduction. See UPAY 545
Priority Comments
[L/M/H]
R002
CTL
R003
CTL
R004
CTL
R005
R006
R007
R008
G-Balance only. (Established by
transaction from AYSO or manually
for paper enrollments).Flat amount
(not a %)
Deduction Priority: (after medical
premiums and FSA but before
OASDI/Medicare).
First two BW of month (skips third).
Doesn’t suspend.
Allows partial.
Keeps a YTD total (for W-2)
Reduces Federal and FICA but not
State.
Deduction Maximum $6550.00
New GTN 613 for employer
contribution. See UPAY 545
Declining Balance. Both G-Balance
and D-Balance will be initialized to
same amount. (Established by
transaction from AYSO or manually
for paper enrollments).
Keeps a YTD total (for W-2)
Pay Schedule X
Deduction Maximum $1000.00
GTN Desc and GTN Label “Health Sav
Ded” for GTN 612
GTN Desc and GTN Label “Health Sav
CON” for GTN 613
The process that accepts
transactions from Open Enrollment
Batch 2 and from AYSO New Hire
must be modified to allow these
applications to initialize GTN 612
It must be possible to enter or
modify GTN 612 on at least one CICS
screen. EGTN would be acceptable.
Per pay-period contribution file
listing employee deductions and
employer contributions. Layout
provided below. Locations should
use PPP490 to create a local report
for auditing/reconciliation.
PIN process consolidates
contribution files from all locations
as available, delivers employee detail
to vendor and summary to benefits
R009
R010
R011
COMPUTE
accounting. One vendor
detail/accounting summary pair per
check date. See layouts below.
Consolidation process includes file
from LBL.
The process that accepts
transactions from Open Enrollment
and from AYSO New Hire must be
modified to allow these applications
to initialize GTN 613
It must be possible to enter or
modify GTN 613 on at least one CICS
screen. EGTN would be acceptable.
No deduction or contribution occurs
unless both of the following are true:
SP coverage begin date (EDB0454)
<= 1st of check month
SP coverage end date (EDB0300) is
nonexistent OR SP coverage end
date >= check date
R012
COMPUTE
R013
COMPUTE
All HSA Employer contribution
activity for an employee in a
compute should be kept off the
contribution file if the net is
negative. An error report should be
produced.
All HSA Employee deduction activity
for an employee in a compute should
be kept off the contribution file if the
net is negative. An error report
should be produced.
Contribution File Layout (from PPS to UCOP Consolidation Process) This is an internal UC file and may be
formatted as convenient.
Location Number
Two digit Campus ID (for internal use by PIN, not
vendor)
Pay Schedule Code
MO,MA,SM,B1,B2,XX
Check Date
Pay Date associated with the contribution (not pay
period end date) For a Rush Check the check date
associated with the compute in which it is
processed, not the date on the check.
Employee SSN
GTN #
612 Employee Deduction or 613 Employer
Contribution.
Amount
Employee First Name
Employee Last Name
Location + Employee Number
Location concatenated to employee number
where Location Codes are:
01 UCB
02 UCSF
03 UCD
04 UCLA
05 UCR
06 UCSD
07 UCSC
08 UCSB
09 UCI
10 Merced
94 LBL –
97 ASUCLA
98 Hastings
Contribution file to vendor (from PIN Consolidation process). One file for every check date found in the
input files from locations.Pipe delimited text file named “Cont_PPS_UC.YYYYMMDDHHMMSS.txt
YYYYMMDD is the check date for contributions contained in the file. HHMMSS should be set from the
system clock. Employee Deduction and Employer Contribution for the same employee are two rows.
Vendor’s Name for Column
Employee SSN
With dashes
Check Date
YYYYMMDD format with leading zeros as needed
and no punctuation.
Contribution Type
Two character code – EE (GTN 612) or ER (GTN
613)
Amount
No “$” sign. No commas. Include decimal point.
Only two decimal places.
Employee First Name
Employee Last Name
Employee Number
Location Concatenated to Employee Number as
provided by location.
Summary for Benefits Accounting (delivered to server FUEGO by PIN consolidation). Any delimited text
format that can be opened by Excel is OK (tab, comma, pipe, etc.). Same name as corresponding
contribution file with “_Summary” appended as “Cont_PPS_UC.YYYYMMDDHHMMSS_Summary.txt”
Location #
First level breakout
Pay Schedule Code
Second level breakout – pay schedule code within
location.
Count of Employees with Employee Deduction
Total Employee Deductions for this location
Count of Employees with Employer Contribution
Total Employer Contributions for this location