Configure HSA Contributions and Employer Matches

This section describes how to configure the HSA contributions as deductions and the employer matches as earnings. Defining the details of the employee contributions and employer match in Payroll Setup follows the normal process for configuring deductions and earnings with some extra steps outlined in this section.

Employer Matches

If the employer matches some or all of the employee contributions, you need to configure the earning in the Earnings tab of Payroll Setup > Earnings and Deductions with the following settings:

• In the General sub-tab, select the Generated radio button.
• In the Parameters sub-tab, select a value in the Calculation Type drop-down list.
• For example, selecting Percent of in the Calculation Type drop-down list and then selecting Deduction in the Lookup Type drop-down list, you can configure the employer match to be a percentage of the employee contribution, or with a percent of value of 100 it can equal the employee contribution. See Create Generated Earning Definitions.

Important: Employer matches cannot be configured with a payee. Do not select the Allow Payee checkbox when configuring an employer match earning.

The configuration of the employer match does not differ from configuring other generated earnings. See Create Generated Earning Definitions.

Note: You cannot configure an employer match without also configuring the employee contribution. The application requires an employee HSA contribution, linked to the employer match, to disburse HSA employer matches.

HSA Contributions

This section provides instructions on the mandatory steps required to configure the deduction that represents employees' HSA contributions. There are additional parameters on deduction definitions that are optional. See Deductions and the Deductions Tab.

To add an HSA deduction:

1. Go to Payroll Setup > Earnings and Deductions.
2. In the Deductions tab, click Add. The Add Deduction dialog box opens.
3. Select Pre-Tax in the Tax Type drop-down list and United States of America in the Country drop-down list, and do not make a selection in the Process for Employment drop-down list.
4. Click Next. The Tax and Compliance dialog box opens
5. Click Select a Rule under United States of America Tax and Compliance, and select an HSA option.
6. Click Select this Rule and then Finish.
7. Enter a name and description of the deduction.
8. Enter a short name of the deduction in the Display Name field. This name is printed on earning statements prepared by the Dayforce Back Office.
9. Note: The maximum length for Canadian and US printed earning statements is 15 characters.
9. In the Options sub-tab, in the Source drop-down list, click Payroll.
10. Ensure that the Declining Balance checkbox is cleared.
11. In the Employer Contribution drop-down list, click HSA Deduction.
12. In the Employer Match Lookup Type drop-down list, select whether the employer match is an earning or a deduction.
13. In the Employer Match Lookup Value drop-down list, select the specific earning or deduction.
14. For example, if the employee’s contributions are matched by the ER Match earning, select Earning in the Employer Match Lookup Type drop-down list and ER Match in the Employer Match Lookup Value drop-down list to configure the application to send them and the deduction to the employee’s HSA account.
14. In the General sub-tab, ensure that the Active checkbox is selected and that the Workers Comp checkbox is cleared.
15. (Optional) Enter a cross-reference code in the Reference Code field.
16. Select the Allow Payee checkbox. The Payees sub-tab is added to the Deductions tab.
17. Click the Payees sub-tab, and in the Payee Category drop-down list, click Health Savings Account Provider.
18. Click Add to add the payee information.
19. In the Payee drop-down list, select the payee, and complete any remaining required fields.
20. Click Save.