Oracle Advanced Benefits

HSA Sample Setup

INTRODUCTION............................................................................................................................................3
DEFINE PROGRAM/PLAN YEARS..............................................................................................................6
DEFINE PLAN TYPES................................................................................................................................... 7
Define HSA Plan .............................................................................................................................................. 8
Define HSA Plan .............................................................................................................................................. 8
Defining Details....................................................................................................................................... 8
DEFINE PROGRAM....................................................................................................................................... 9
Benefits Program ..........................................................................................................................................9
Defining General Information ..................................................................................................................9
Defining Periods.......................................................................................................................................9
Associating Plans and Plan Types............................................................................................................9
Associating Plan Types.............................................................................................................................9
Associate an Eligibility Profile with a Program ....................................................................................10
DEFINE PROGRAM ENROLLMENT REQUIREMENTS..........................................................................11
Define Timing Scheduled Information ............................................................................................. 11
Define Timing Life Event Information .............................................................................................11
DEFINE ELEMENT TYPES.........................................................................................................................13
Defining an Element HSA deduction .........................................................................................................13
Defining an Element HSA ER Liability.....................................................................................................13
CREATING AN ELEMENT LINK................................................................................................................14
DEFINE HSA Coverage.................................................................................................................................15
CREATING A POST ELECTION EDIT .......................................................................................................15
ATTACH POST ELECTION EDIT............................................................................................................... 15
SETTING UP STANDARD RATES FOR HSA............................................................................................ 15

SAMPLE PLAN DESIGN IS COMPLETE..........................................................17

INTRODUCTION
Document Purpose:
This document is intended to provide a best practice setup for health Savings Accounts in
Oracle Benefits. The document is not all-inclusive and does not handle all configuration
possibilities. Please test all configurations thoroughly through all of your business
processes.
Background:
Arising from new health cost containment pressures the market has created a new plan
called HSA which stands for "Health Savings Account," The U.S. Congress recently
passed legislation which makes paying for medical expenses much more affordable for
consumers. As of January 1, 2004, the new law provides broad access to Health Savings
Accounts, which allow consumers to pay for qualified medical expenses with pre-tax
dollars (income-tax free!) and save for retirement on a tax-deferred basis.
An HSA is tax-favored savings account that is used in conjunction with a high-deductible
(HDHP) HSA-eligible health insurance plan to make healthcare more affordable and to
save for retirement.
Pre-tax money is deposited each year into an HSA and can be easily withdrawn at any
time with no penalty or taxes to pay for qualified medical expenses. Withdrawals can also
be made for non-medical purposes, but will be taxed as normal income and are subject to a
10 percent penalty if done prior to age 65. Implies that after you can use for any
purpose without penalty and benefits from living a healthy life style by having extra
retirement money.
Any HSA funds not used each year remain in the account, and earn interest tax-free to
supplement medical expenses at any time in the future.
Like an IRA, the account belongs to you, not your employer. But unlike an IRA, your
employer CAN contribute to your HSA. In order to have a Health Savings Account, you
must get an HSA-eligible health insurance plan. This type of insurance plan is often
referred to as a High Deductible Health Plan, and typically has lower premiums than plans
with lower deductibles.
A health insurance plan must meet the following criteria to be considered HSA-eligible:
The health insurance plan must have an annual deductible of at least $1,000 for
individuals and at least $2,000 for families.
The sum of the annual deductible and the other annual out-of-pocket expenses
required to be paid under the plan (other than premiums) does not exceed $5,100 for
individuals and $10,200 for families.

NOTE: If you have other health insurance coverage (such as coverage under a spouse's
employer-sponsored plan) in addition to your HSA-eligible health insurance plan, then the
other plan must 1) also be HSA-eligible in order to contribute to an HSA or 2) the other
plan cannot cover any benefits provided under your HSA-eligible plan.
Where are funds held
Funds in an HSA are held in a trust and are administered by a bank,
insurance company, or other approved Trustee (TPA). This institution
is often referred to as your HSA Administrator.
Funds in your HSA are invested at your discretion. Typically an HSA
will allow you to choose from one or more of the following investment
options:

Interest-bearing account

CDs

Money market funds

Mutual Funds

Using funds in your Health Savings Account:

Typically an HSA will provide you with a checkbook or debit
card. When you pay for qualified medical expenses, use the debit card
or check to make the payment.

You do not need to get approval from the HSA administrator

when you use funds in your account.

You do not need to submit receipts to the HSA administrator,

although you should save them just as you keep receipts for other items
that are deducted from your taxes.

NOTE: You must establish the HSA before you incur medical expenses
otherwise the expenses will not qualify.
HSAs save on your taxes:
At the end of each year, you can deduct the amount contributed to your HSA that year.
You can deduct this amount provided it is less than or equal to the maximum allowable
contribution. Much like an IRA, HSA deductions are "above-the-line" and thus can be
taken even if you do not itemize.

Setup:
Currently assumptions are TPA will store balance and accumulate balance from weekly
feed of run result deductions. Some CT may send rate and not require that the element
entry prove itself through payroll. TPA will provide web access to employee to review
balance and submit claims. There may be an issue if employee has another HSA through
another provider but if they do they must be paying two medical premiums, so its unlikely.
We leave this responsibility with employee to only enroll in on HAS plan. We can enforce
restrictions that you only be allowed to enroll in a HSA OR FSA if you implement both by
sharing a plan types of savings account with max 1 allowed. You will only be able to enroll
in HSA if you choose the high deductible medical plans which can be achieved by using a
post election edit.
Base setup is similar to FSA. The major difference is the user enterable coverage may
depending on requirements, require a Fast formula to take the lesser of flat amount or
deductible ie)
Maximum yearly contributions are determined as follows:
For individuals, it is the lesser of:
a) $2,650
b) Your health plan's annual deductible (variable)
For families, it is the lesser of:
a) $5,250
b) Your health plan's annual deductible (variable)
You do not have to contribute the maximum each year, although some HSAs require a
small minimum monthly contribution.
Note: If you are between the ages of 55 and 65, you can make an additional annual "catch
up" contribution (of up to $600 in 2005.). We can achieve with a derived factor on
coverage or manually managed if required.
*If you enroll in an HSA-eligible health plan in the middle of the calendar year, your
maximum contribution for the first year will be prorated based on the number of months
you have the HSA-eligible health plan. For example, if your individual health plan's annual
deductible is $3600, and you enroll in the HSA-eligible plan on June 1st, then your
maximum contribution for the first year can be up to $2100 (i.e. 7/12 of $3600). If you are
enrolled for all twelve calendar months, then you can contribute the amount of the
deductible up to the annual maximum allowed ($2650 in Year 2005). This can be handles
with annual rate definition on the standard rate form.

DEFINE PROGRAM/PLAN YEARS

1. Navigate to the Program/Plan Years form in Total Compensation:
Total Compensation General Definitions Additional Setup Program/Plan Years
2. Enter 01/01/2000 as the Plan Start.
3. Enter 12/31/2000 as the Plan End.
4. Save your work
5. Repeat for each year up to 2005

DEFINE PLAN TYPES

1. Name the plan type HSA (or Savings Account if you want to share plan types to
enforce only one enrollment between FSA and FSA)
2. Choose Other as the Option Type.
3. Check the No Min box.
4. Check the No Max box.
5. Save your work.

Define HSA Plan

1.
2.
3.
4.
5.
6.

Name the plan HSA

Choose Active as the Status.
Choose HAS or Savings Account as the Plan Type.
Choose Must Be in Program for the Usage.
Navigate to Plan Restrictions
Save your work.- Note: you may want to create options for your HAS if requirement
dictate

Defining Details
8. Select the Details button.
9. Enter 10 as the Sequence.
10. Choose 01/01/2000 and 12/31/2000 as the Start and End Date.
11. Enter 20 as the Sequence.
12. Choose 01/01/2001 and 12/31/2001 as the Start and End Date.
13. Repeat steps 7-11 for each plan year period
14. Save your work.

DEFINE PROGRAM
Benefits Program
1. Navigate to the Program form in Total Compensation:
(N) Total Compensation Programs and Plans Programs
2. Name the program Benefits Program.
Defining General Information
3.
4.
5.
6.

Select the General tab.

Choose Active as the Status.
Choose Core as the Program Type.
Choose Monthly as the Activity Reference Period. (This determines the periodicity
of all rates so that they are consistent. Choose the one that is appropriate for your
company. Note: upon enrollment all rates are converted into per-pay amounts when
passing to element entries.)
7. Choose Per pay period as the Enrollment Rate Frequency.
8. Select US Dollar as the currency.
9. Save your work.
Defining Periods
10. Select the Periods tab.
11. Enter 10 as the Sequence.
12. Select 01/01/2000 and 12/31/2000 as the Start and End Date.
13. Enter 20 as the Sequence.
14. Choose 01/01/2001 and 12/31/2001 as the Start and End Date.
15. Repeat steps 11-14 for each plan year period
16. Save your work.
Associating Plans and Plan Types
17. Select the Plans and Plan Types button.
18. Select the Plans tab.
19. Enter 10 as the Sequence.
20. Select the HSA.
21. Select Active as the status.
22. Repeat step 19 to 21 for all plans in your program.
23. Save your work.
Associating Plan Types
24. Select the Plan Types tab.
25. Enter 10 as the sequence.
26. Select the HAS or Saving Account Plan Type.
27. Select Active as the status.
28. Repeat steps 25-27 for all plan types for your program.
29. Save your work.

Associate an Eligibility Profile with a Program

30. Select the Participation Eligibility Button.
31. Enter As of Event Date for the participation start date.
32. Enter One Day before Event as the participation end date.
33. Save your work.
34. Select the Eligibility button.
35. Although not required, you may choose to restrict eligibility at the program level like
you would for any other program.
36. Save your work.

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DEFINE PROGRAM ENROLLMENT REQUIREMENTS

1. Navigate to the Program Enrollment Requirements window in Total Compensation:
Total Compensation Programs and Plans Program Enrollment Requirements
2. Query the Benefits Program.
3. Select the General tab.
4. Select the Program tab.
5. Select the Enrollment alternate region.
6. Select Explicit as the Method.
7. Select Current, Can Keep or Choose; New, Can Choose as the Enrollment Code.
8. Select the Coverage alternate region.
9. Indicate Event as the Enrollment Coverage Start Date.
10. Indicate 1 Day Before Event as the Enrollment Coverage End Date.
11. Select the Rates alternate region.
12. Indicate Event as the Rate Start Date. (This is the date the element entry will begin.)
13. Indicate 1 Day Before the Event as the Rate End Date.
14. Save your work.
Define Timing Scheduled Information
15. Select the Timing tab.
16. Select the Scheduled tab.
17. Indicate Open as the Enrollment Type.
18. Choose 01/01/2003 to 12/31/2003 as the Year Period.
19. Select the General alternate region.
20. Indicate 11/1/2002 to 11/30/2002 as the Enrollment Period Start and End Dates.
21. Enter 12/01/2002 as the date Defaults Will Be Assigned.
22. Enter 12/31/2002 as the No Further Processing Allowed date.
23. Enter 01/01/2003 as the Assigned Life Event Date.
24. Enter Processing End Date as the Close Enrollment Date to Use.
25. Save your work.
26. Repeat 6-13 for each program/plan year annual enrollment period
27. Save your work.
Define Timing Life Event Information
28. Select the Timing tab.
29. Select the Life Event tab.
30. Indicate Life Event as the Enrollment Type.
31. Select New Hire as the Life Event. (You must first define a life event in order to
choose it from the list of value here. You must select a life event on the timing tab in
order for the enrollment requirements to be examined when the person experiences the
event.)
32. Select the General alternate region.
33. Indicate 1 as the Days After Period for Defaults.
34. Choose When Elections are Made as the Close Enrollment Date to Use Code.

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35. Select the Periods in the alternate region.

36. Indicate As of Event as the Enrollment Period Start Date.
37. Indicate 30 days after event as the Enrollment Periods End Date.
38. Save your work.

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DEFINE ELEMENT TYPES

The element examples were written primarily for Non Oracle Payroll customers. All
customers will utilize the compensation and benefits model and its processes to calculate
the exact input value amount for each element. Oracle Payroll customers must define
elements following the Oracle Payroll User Guide to determine how the input value
amounts, calculated by compensation and benefits, will be processed by Oracle Payroll.
You will need to define an element to capture the positive amounts to be added to a
persons payroll and an element to capture the negative amount that must be subtracted
from their paycheck.
Defining an Element HSA deduction

1. Navigate to the Element Description form in Total Compensation:

Total Compensation Basic Element Description
2. Name the element HSA
3. Give a Reporting Name of HAS.
4. Give the element a Primary Classification of Voluntary Deduction.
5. Select Recurring as the Processing Type.
6. Save your work; select the Input Value button.
7. Enter HSA as a name; indicate Money as the units.
8. Check the DB Item box and User enterable check boxes.
9. Save your work.
Defining an Element HSA ER Liability
10. Navigate to the Element Description form in Total Compensation:
Total Compensation Basic Element Description
11. Name the element HAS ER
12. Give a Reporting Name of HAS ER.
13. Give the element a Primary Classification of Er Liability.
14. Select Recurring as the Processing Type.
15. Save your work; select the Input Value button.
16. Enter HSA as a name; indicate Money as the units.
17. Check the DB Item box and User enterable check boxes.
18. Save your work.

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CREATING AN ELEMENT LINK

1. Navigate to the Element Link form in Total Compensation:
Total Compensation Basic Element Link
2. Query the element HSA.
3. Save your work.
4. Repeat for HSA ER
Note: Create an open link when costing is not utilized. Do not create an open link for
elements that need to be costed, instead, create links based on the costing criteria.
Repeat for each element defined above.

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DEFINE HSA Coverage

1. Navigate to the Benefits Pools window in Total Compensation:
Total Compensation Rates/Coverage Definitions Coverage Calculation
2. Name the Coverage HSA
3. Type of coverage
4. Select the General Tab.
5. Select the Level as Plan.( you may need several coverages if you set up options in
your HSA plan)
6. Select Compensation object appropriate
7. Select Calculation Method tab
8. Select Calculation Method of Flat amount
9. Click user enterable field
10. Enter min, max, increment an default amounts ie) 0, 2650, 1 , 0
11. Save your work.

SETTING UP STANDARD RATES FOR HSA

HSA Employee Contribution
1. Navigate to the Standard Rates form in Total Compensation:
2. (N) Total Compensation Rates/Coverage Definitions Standard Rates
3. Name the rate HSA EE Contrib
4. Indicate Active as the Status.
5. Select the General tab.
6. Determine Plan in Program as the Level.
7. Define ???? as the Compensation Object.
8. Select Employee Payroll Contribution as the Activity Type.
9. Select Pretax as the Tax Type.
10. Select HSA as the Element and Amount.
11. Determine Employee Assignment as the Assignment.
12. Check Element and Input Value Required Note: form defaults this flag to ON
13. Select the Calculation Method tab.
14. Set annual rate to equal coverage.
15. Save your work.
16. Select the Annual Rates tab
17. Select estimate only on expected contributions
18. Select the Processing tab.
19. Check box Assign on Enrollment, Display on Enrollment, and Process Each Pay
Period Default.
20. Select Payroll as the Processing Source.
21. Indicate that the rate is Recurring.
22. Save your work.
HSA (Employer Contribution)if applicable
1. Navigate to the Standard Rates form in Total Compensation:

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2. (N) Total Compensation Rates/Coverage Definitions Standard Rates

3. Name the rate HSA ER Contrib
4. Indicate Active as the Status.
5. Select the General tab.
6. Determine Plan in Program as the Level.
7. Define ???? as the Compensation Object.
8. Select Employer Payroll Contribution as the Activity Type.
9. Select Not applicable as the Tax Type.
10. Select Has ER as the Element and Amount.
11. Determine Employee Assignment as the Assignment.
12. Check Element and Input Value Required Note: form defaults this flag to ON
13. Select the Calculation Method depending on your req ie) if ER contributes flat amount
enter flat amount, you may need a post enrollment formula here if the contribution
logic is variable.
14. Save your work.
15. Select the Processing tab.
16. Check box Assign on Enrollment, and Process Each Pay Period Default.
17. Select Payroll as the Processing Source.
18. Indicate that the rate is Recurring.
19. Save your work.

CREATING A POST ELECTION EDIT

1.
2.
3.
4.

Navigate to Total Compensation:

Total Compensation Basic Write Formulas
Create formula called: HAS Post election edit with a formula type of Post election edit
Save your work.

ATTACH POST ELECTION EDIT

1. Navigate to Total Compensation:
2. Total Compensation Program enrollment requirementsGeneral Plan TabQuery
formula in enrollment region post election edit rule
3. Save your work.

SAMPLE PLAN DESIGN IS COMPLETE

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