HSA ImplementationPotential CIP Failures Reasons •Data Accuracy is critical to avoid CIP Failure and to ensure the PPT has a positive enrollment experience •True CIP failure i.e

HSA Implementation

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Communications& Materials

Effective Communications

• Get the word out via multiple channels

• Increase awareness and understanding of the new benefits

• Deliver a smooth transition for you and your employees

© 2015 WageWorks Inc. All rights reserved. 3


Health Savings Accounts

BNY Mellon - Features

HSA Platform

• Integrated account and investment management platform on WageWorks.com

• FDIC insured, interest-bearing “liquid” account• Mutual funds with no per-trade fees• Automatic fund allocation capabilities• 24/7 access to statements and tax forms

BNY Mellon - Investment Options

• 32 standard investment options (list available in Appendix)

• 5 Fund classes

• Large Cap - U.S. Equity - (5)

• Small and Mid Cap - U.S. Equity - (6)

• Non-U.S. Equity - (6)

• Fixed Income - (5)

• Asset Allocation - (10)

• No additional enrollment or separate site access is required to invest

• $1,000 minimum to invest, first time only

HSA Enrollment

• Online Enrollment• Two steps for employee• Enrolls via employer portal• PPT registers and completes online HSA application on

wageworks.com website

HSA Eligibility & Limits• Enrolled in eligible HDHP

• Not covered by other non-HDHP insurance, Medicare, VA benefits, or full-purpose/standard FSA (including spouse’s)

• Partners (anyone receiving a K1 instead of W2) are only eligible to contribute on a post-tax basis

2016 2017 Type of Coverage

$3,350 $3,400 Self Only Coverage

$6,750 $6,750 Individual with Family Coverage

$1,000 $1,000 Catch Up Contribution for Age 55 or over

$6,750 $6,550 Self Only Coverage


$1,300 $1,300 Self only Coverage


IRS Limits Health Savings Accounts

HSA Annual Contribution Limit – cannot exceed

Annual HDHP Out of Pocket Expenses cannot exceed

Annual HDHP Deductible – cannot be less than

Customer Identification Program (CIP)

• Identity verification/vetting

• According to the US PATRIOT Act of 2003, financial institutions are now required to obtain, verify, and record specific information

• The following information is collected at time of enrollment for CIP:

• Name, Date of Birth, SSN, residential

address

• Communication campaign to PPT

about CIP

BNY Mellon developed a patent-pending process for verifying the identity of account owners to comply with regulatory obligations related to Section 326 of the USA PATRIOT Act.

This process includes:

• Non Documentary Verification Method

• Document Verification Method

• Failure to Identify Situations

• Government List Matching

CIP REQUIREMENTS

EMPLOYER ADVANTAGE

Potential CIP Failures Reasons

• Data Accuracy is critical to avoid CIP Failure and to ensure the PPT has a positive enrollment experience

• True CIP failure i.e. fraudulent data or some other issue identified as a part of the Patriot Act is less than 1%.

• The majority of the time CIP issues are the result of the following:

• DOB does not match SSN – numbers can be transposed or simply entered incorrectly.

• Bad address- Although we can accept a PO Box for a mailing address, BNY Mellon will require a residential address to verify an individual. We recommend you provide a separate list of residential addresses for all PO Box’s on file.

• Not enough history, credit or other information - often times with younger individuals there is simply not enough information available through the various credit databases to satisfy identity verification.


CIP Timeline

Days 1-7

• Information campaign to educate PPT about CIP.

• Correspondence letter sent by custodian to the account owner

Days 16-55

• Reminder notice sent to the account owner

Days 70-89

• Liquidation notice sent to the account owner

Day 90

• Account liquidated and closed

• Proceeds are sent to the account owner

WageWorks interacts with Employer to encourage verification

BNY notifies WageWorks on a weekly basis of unverified accounts

HSA-Compatible FSA

• HSA-compatible FSA may be converted to a full purpose FSA after the HDHP deductible has been met

• Options for Employers:

• EE can send in request to change to full FSA by sending in copy of the EOB and the HSA/HDHP Deductible Form indicating they have met their HDHP deductible(Best Practice)

• Do not allow change from HSA Compatible to Standard

• Employer can send this change in the ENR record of the Program Sponsor File

• Full purpose FSA cannot be converted to LFSA during plan year.

• HSA Compatible FSA covers only Dental and Vision and the type of account is designated on the ENR file.

Fees, Statements & Tax Forms• $2.00 Custody and Administrative Fee (if applicable) – The foregoing fee charged by BNY Mellon is in addition to any fees

paid by the employer. The fee will be deducted directly from the HSA on a monthly basis. The fee is waived if the employee’s average daily account balance is over $5000. The employee must have funds in the account every day in the month for the waiver to be effective.

• $16 transfer of assets fee – charged if balance is transferred to another custodian bank

• Statements – generated Quarterly by BNY• If Batch Enrollment, accounts will be defaulted to paper; employees must change preference if they want e-statements.

• W2• Deductions and/or employer contributions are included in box 12

• Form 1099-SA• Provided by the account custodian (trustee) to report the total distributions from the account. Mailed and available

online in January.

• Form 5498-SA• Provided by the account custodian (trustee) to report the total contributions deposited to the account. Mailed and

available online in May.

• Form 8889• Participant must complete this form to report the HSA activity for the tax year • Form is filed with their 1040• Use 1099 and W2 to complete, as 5498 isn’t delivered until after tax deadline

Tax Forms are available for 5 years online on the BNY Mellon site

Employee Separation• Receiving a Termination Date on profile (PRO) record kicks off the

“orphaned” HSA process

• Spending card and other functionality remains active for the HSA

• Card will no longer access FSA account (if applicable)

• WageWorks will notify the participant in writing of their options:

• Do nothing / keep HSA open with WageWorks• $3.95/mo deducted from HSA balance. Acct will be closed if balance falls to $0.

• Liquidate and close the account• Subject to taxes plus penalty if the liquidated funds are not used for qualified

health expenses, or not deposited to another qualified account within 60 days

• Submit BNY Mellon closure form

• Request funds be transferred to another custodian• Complete ‘new’ custodian’s Transfer of Assets form


The EmployeeExperience

Enrollment and Registration

• Enrollment

• Enroll in benefit via Company Benefit Portal

• Accepting Terms and Conditions

• Note regarding the $2.00 Custody and Administrative Fee (if applicable) – The foregoing fee charged by BNY Mellon is in addition to any fees paid by the employer. The fee will be deducted directly from your HSA on a monthly basis. The fee is waived if your average daily account balance is over $5000. You must have funds in the account every day in the month for the waiver to be effective.

• CIP Process

• Registration

• PPT sets Communication Preferences

• Encourage PPT to Download Mobile App


Employee Site & Notifications• Online view of all activity is always available

• One view for all plan types

• Claim/reimbursement notices can be sent when claim submitted, approved/denied, and paid out

• Reimbursement notice mailed if participant does not have email address on file.

Payment Options

EZ Receipts

• File a claim and upload

a picture of receipt

• Supports iPhone, Android and

Blackberry smart phones

Pay My Provider

• Online bill payment for

HC / DC expenses

• Ideal for co-insurance, day

care, ortho and dental.

Pay By Card

• Proprietary debit card

• 84% auto-adjudication

rate

• Recurring expenses, co-

payments, deductibles

• IIAS only or full MCC

Pay Me Back

• Mail, fax, online

• Daily reimbursement

• 48-hour claims turn-around

• Check and Direct Deposit

Pay Me

• HSA ONLY

• Auto-reimbursement

via check or direct

deposit

• Send payment to yourself

• No receipts required

• Access thru the PPT site, or Mobile App

• Balances Coordinated and Synchronized

• More options to meet the needs of more employees!

Mobile App


Check balances, request funds and submit claims using a

smartphone or tablet.

Mobile Site Access


All options are dynamically displayed based on enrollment (history)

Customer Service

• Participants may call for account information at

1-877-WAGEWORKS (877-924-3967)

• Customer Service Representatives are available Monday thru

Friday, 8 AM to 8 PM ET (excluding holidays)


Funding & Invoicing

HSA Funding and Invoicing

• No prefund or up front funding required

• When the funding file is sent to WageWorks the grand total of the contributions and deductions for the open HSA accounts will be debited from your bank account the next business day.

• The amount is then applied to the open employee accounts on the third business day.

Monthly service fees for HSA will be charged on same invoice as FSA service fees

HSA Funding Model – BNY Mellon

• Submit Funding (FND) record

• If submitted by 2:00 CST will process same day

• ‘Funding Date’ determines processing date (if later than date of file load)

• Files posted after the ‘Funding Date’ process when received

Day 0

• Funding Report generated

• Captures only funds that were able to post to open HSAs

• Email notification to client with dollar amount

Day 1

• Funding due to WageWorks (WW will pull funds via ACH Debit)

• Funds visible on WageWorks’ website

• Funds are available in the account holder’s HSA (on Card in evening)

Day 2

HSA Funding – Sample Timeline

Tuesday 24th

• Run payroll

• Create FND with HSA contributions (using 25th as ‘Funding Date’)

• Load FND file to WageWorks (or early Wednesday)

Wednesday 25th

• Load FND to WageWorks early in the day

• Contributions for yet-to-be-opened accounts are set to ‘Pending’, not sent to BNY

Thursday26th

• Email notification of report sent to client, advises funds will be pulled the next business day

• Funding Report generated, captures Posted, Pending, and Rejected contributions

• WW sends contribution records to BNY Mellon to post

Friday27th

• BNY reports to WW what was posted and rejected (due to closed account)

• WW debits $ from client bank account, equal to the total $ amount of contributions POSTED.

• Employee payday

• Contributions post on WW site, visible to employees

• HC Card balance updated

HSA Pending Contributions

• Pending Contributions Option

• This information is to address an HSA Funding record received for a participant when, at the time of receipt, the participant’s account has not been opened by the custodian (application not yet completed).

• You have the option as the Program Sponsor to have your plan set up to not reject a HSA funding record if the account is not yet open. Instead funding goes into a PENDING status and will be automatically posted when the HSA account is OPENED by the employee.

• Once the participant account is open all pending contributions will be applied and included on the next day’s HSA Contribution Funding report for the grand total of the previously pended amount.

HSA Expired Contributions

• According to IRS Regulations, in order to apply a contribution

to a HSA in a given calendar year, the HSA must be opened

before 12/31 of that same year.

• All pending contribution records in the WageWorks database

with a Funding Date prior to 1/1 will be expired shortly after

04/15 if the HSA is not open as of 04/10.

HSA Funding File Corrections

• If Client sends a negative HSA Funding record amount, the record will reject.

• All reversals must be requested with the WageWorks Relationship Manager and

processed by the WageWorks HSA Operations team

• The entire funding record amount must be reversed

• Partial amounts can not be reversed

• The reversed amount will appear as a credit on the next funding report, reducing

the amount you are charged for that HSA contribution cycle

• Example: A $250 funding record is sent. The amount should have been $175 as that

was what was actually taken from payroll

• An adjustment will reverse the $250 record

• A new record for $175 will need to be sent


Appendix

Investment Fund List


Mutual Fund Investments

Large Cap - U.S. Equity Symbol

Davis New York Venture Class A NYVTX

Victory Diversified Stock Class A SRVEX

JP Morgan Large Cap Growth Select Shares SEEGX

Vanguard Dividend Appreciation Index Investor VDAIX

Schwab Fundamental U.S. Large Company Index SFLNX

Small and Mid Cap - U.S. Equity

Artisan Small Cap Fund ARTSX

Oppenheimer Main Street Mid Cap OPMSX

Neuberger Berman Mid Cap Intrinsic Val Inv NBRVX * Closed to New Investors

American Century Mid Cap Value Investor Class ACMVX

Parnassus Mid Cap Fund PARMX

Vanguard Small Cap Index Admiral Class VSMAX

JPMorgan Small Cap Value Select PSOPX




Non-U.S. Equity

Dodge & Cox International Stock Fund DODFX

Thornburg International Value Class I TGVIX

Vanguard Developed Markets Index Admiral VTMGX

Vanguard Emerging Markets Stock Index Admiral VEMAX

Harbor International Fund Instl Class HAINX

American EuroPacific Growth Fund Class R-6 RERGX

Fixed Income

Harbor Bond Fund HABDX * Closed to New Investors

AMG Intermediate Duration Government Fund MGIDX

Vanguard Short Term Investment Grade VFSTX

Dodge & Cox Income Fund DODIX

Metropolitan West Total Return Bond Class M MWTRX

Pimco Low Duration Class D PLDDX * Closed to New Investors

Vanguard Long-Term Bond Index Investor VBLTX




Asset Allocation

Vanguard LifeStrategy Conservative Growth Investor VSCGX

Vanguard LifeStrategy Moderate Growth Investor VSMGX

American 2020 Target Date Class R6 RRCTX

American 2025 Target Date Class R6 RFDTX

American 2030 Target Date Class R6 RFETX

American 2035 Target Date Class R6 RFFTX

American 2040 Target Date Class R6 RFGTX

American 2045 Target Date Class R6 RFHTX

American 2050 Target Date Class R6 RFITX

American 2055 Target Date Class R6 RFKTX

Documents

HSA ImplementationPotential CIP Failures Reasons •Data Accuracy is critical to avoid CIP Failure and to ensure the PPT has a positive enrollment experience •True CIP failure i.e