Who is responsible for funding the employee’s HSA Advance account?

As the employer offering this feature, you are responsible for funding the HSA Advance account for all eligible employees.

How does HSA Advance work?

From an employer perspective, HSA Advance works like this:

1. You select the bank account that will fund the HSA Advance account and to which repayments will be made.
2. Using the Employer Account or a CDEx file, designate the amount that will be available for each employee.
3. When an employee uses their Benefits Card or pays an expense, the system determines whether HSA Advance funding is needed and automatically generates a funding transaction to pull funds from the designated bank account to contribute to the consumer’s HSA to be used to settle the distribution request. 
   NOTE: The system will automatically deplete the consumer’s HSA balance (cash and investments) before drawing from the HSA Advance account.
4. As payroll deductions and employer contributions are applied to the employee’s HSA throughout the Plan Year, they will automatically be used to repay the HSA Advance fund account.

This is how HSA Advance works for employees:

They pay for an eligible expense, where the cost is more than what has already been contributed to their HSA.

1. Money from their HSA that has already been contributed will be used first to pay for the expense.
2. If they have money in their HSA investment account, that money will automatically be used next.
3. Then, money from HSA Advance will be used to pay for the remainder of the expense – as long as they have elected to contribute that much or more for that Plan Year, or the employer’s policy allows HSA Advance to cover that much.
4. They will then have an HSA Advance balance, which will automatically be repaid through payroll deductions and employer contributions until the HSA Advance balance is paid in full.

What is HSA Advance?

While HSA use continues to grow, it can be intimidating to decide to switch to an HSA-eligible high deductible health plan (HDHP). Surency’s HSA Advance feature provides you with another way to incentivize employees to participate.

HSA Advance enables you to provide HSA funds to your employees to pay for eligible expenses before they have contributed the funds themselves. A typical scenario is at the beginning of a Plan Year when an employee first enrolls in an HSA or an existing enrollee has a zero balance, and incurs an unplanned medical expense. You set the amount per employee.

What happens after Surency closes the Plan Year?

Surency closes your Plan Year 180 days after the Plan Year end date. At this time, Surency provides a detailed report for the previous Plan Year and a full accounting of open, unresolved repayments (taxable items). Repayments will be cancelled, debit cards will be all set to in-active and claim denials will be finalized.

When will the reporting be available for a Closing Plan Year? 

The updated Account Balance Detail report will be provided 185 days after the closing of the Plan Year. The Account Balance Detail Report will be generated the 2nd day of the month following the 180 day mark.

What reporting will be provided for a Closing Plan Year?

Surency will provide you with an updated Account Balance Detail Report for the previous Plan Year and a full accounting of open, unresolved repayments (taxable items).

What are taxable items?

Taxable items are pending repayments from the Plan Year. Pending repayments could be a result of a debit card transaction where the participant did not provide a receipt (claim substantiation) or the transaction was determined to be an ineligible expense. 

Why is it important to close a plan year?

The IRS requires employers to report and take additional action when participants have taxable items. Therefore, in order to comply with the IRS regulations, it is important that Surency assist with the closing of your Plan Year to provide necessary reporting. 

What is “Closing of a Plan Year”?

Closing of a Plan Year is a final review of the reimbursement accounts for all repayments throughout the Plan Year.