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Health Savings Plan setup based on Fiscal Year
Summary
When employee enrolls in HSA, amount elected is using the calendar year instead of the fiscal yearContent
My clients open enrollment is aligned to their fiscal year (July - June) rather than a calendar year. I have set up fiscal year for the plan periods, which works for all of their other plan types however for the Health Savings Plan, when an employee enrolls and selects their annual amount, the system is calculating the per-pay amount using the remaining periods in the calendar year instead of the fiscal year. Here is our requirement:
HSA employee election - The employee determines the annual amount they want to contribute. That amount should be spread over the remaining periods in the fiscal year to get the per pay amount. Per IRS rules, an employee cannot contribute more than the annual limits based on the calendar year, so the limits have to be based on calendar year.