This article explains the deadlines for employers making contributions to their employees' Health Savings Accounts (HSAs) and provides important information on aligning contributions with payroll schedules and IRS guidelines.
Question(s):
What is the deadline to make contributions to my employees' HSAs?
Answer:
While Lively does not impose specific deadlines for payroll contributions, employers are encouraged to make contributions as soon as payroll withholdings are deducted. Lively offers different methods to manage HSA contributions, allowing flexibility for employers.
Contribution Methods on the Lively Platform:
- Direct Deposit Contributions: If you process HSA contributions as part of your payroll, using direct deposit allows funds to be transferred to employees' HSAs as soon as they clear through the Automated Clearing House (ACH). This is a quick and efficient way to make funds immediately available to employees.
- File Contributions: For employers using file-based contribution methods (via the Lively employer dashboard or SFTP(Secure File Transfer), files can be submitted at any time. Once submitted, Lively processes the contributions immediately, or employers can schedule file submissions to align with payroll dates. This ensures contributions are made on a regular, predictable schedule.
- Employer Dashboard Contributions: Lively also offers an HSA payroll management feature within the employer dashboard. This tool automates HSA contributions based on the payroll schedule provided by the employer. Four days before the scheduled payroll, Lively sends a reminder to review and approve contributions. Employers are encouraged to approve these contributions promptly to ensure that funds are available to employees as soon as possible.
However, even though Lively does not enforce strict deadlines related to how employers process payroll and make HSA contributions, the IRS requires that all contributions for a given tax year be made by the tax filing deadline, which is typically April 15 of the following year. For example, contributions for the 2023 tax year must have been made by April 15, 2024. This deadline applies to both employee and employer contributions and Lively does enforce this deadline across all HSA contribution methods.
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