HSA Implementation.

HSA Implementation

Communications & Materials
©2013 WageWorks Inc. All rights reserved.

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 Get the Word Out via Multiple Channels Deliver a communications campaign to increase awareness of the “Super Hero Bank Account” Explain the value of an HSA Promote the savings and investment opportunity Ensure the transition is smooth and effective for Walmart and Walmart’s Associates Web: WalmartOne.com, microsite, Alex Web assets: ads, banners, infographics s: announcements, reminders, informational Traditional: mail, posters, re-enroll cards Meetings: in person, webinars © 2015 WageWorks Inc. All rights reserved.

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 5

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 Need to make sure funds are up to date when presenting

HSA Enrollment Online Enrollment Two steps for employee
Enrolls via employer portal PPT registers and completes online HSA application on wageworks.com website Make sure specific conversation to configure the Employer enrollment portal/hosting agreement and instructions (in appendix) SSN vs unique ID’ time/date stamp; if defaulted to estatement – need to have address;

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 Has to be updated/current each time.

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 Communication plan to PPTs; CIP requirements 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. If global issues – WW will reach our to ER/elig vendor to validate data Client will need to provide a residential address file if large number of PO boxes on the file otherwise PPT is responsible to validate and will be notified by BNY Mellon with details of what is required, and how to confirm. DOB/SSN mismatch: any documentation that can confirm the name/address/SSN together – ER may also need to correct their data Bad Address: No PO boxes for validation purposes (ok for mailing address), foreign addresses are not supported History/Credit: Additional documentation samples: payment history, documentation showing name/address/payments, BNY Mellon uses multiple sources to confirm identity. Note: We have in the past received data where individuals have stolen SSN or other identity information. ©2014 WageWorks Inc. All rights reserved.

CIP Timeline Days 1-7 Days 16-55 Days 70-89 Day 90
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 Communication campaign –prior to enrollment Account owner definition: PPT Letter samples: (see appendix) BNY notifies WageWorks on a weekly basis of unverified accounts WageWorks interacts with Employer to encourage verification

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 monthly service fee – charged by BNY Mellon near the end of each month; deducted directly from account balance. Waived if balance exceeds $5,000. $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 Employee Experience

Enrollment and Registration
Enroll in benefit via Company Benefit Portal Accepting Terms and Conditions CIP Process Registration PPT sets Communication Preferences Encourage PPT to Download Mobile App Other Enrollment Options: Batch/online Enrollment Terms/conditions – paper, online or batch CIP – only impacts PPT if can’t be validated/verified (see slide 18) ©2014 WageWorks Inc. All rights reserved.

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 address on file. New Screen Shots needed

LFSA and HSA balance on one card!
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! LFSA and HSA balance on one card! Thru PPT site

© 2015 WageWorks Inc. All rights reserved.
Mobile App Check balances, request funds and submit claims using a smartphone or tablet. This slide has animations. Click to advance (changes screens on phone.) © 2015 WageWorks Inc. All rights reserved.

Customer Service Participants may call for account information at WAGEWORKS ( ) Customer Service Representatives are available Monday thru Friday, 8 AM to 8 PM ET (excluding holidays)

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 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 Be sure to highlight when funds are “available/ visible” on the ppt site. This is what they are most concerned about.

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 Thursday 26th 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 Friday 27th 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 This is an example using dates of when funds would be available to the PPT.

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 Operations recommends that all clients be set up to not reject HSA funding records if account is not open But should reject, if duplicate Clients should not fund these records until they appear on the HSA Contribution Funding Report

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. Records do not expire until after the tax year is over

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

Mutual Fund Investments
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 © 2016 WageWorks Inc. All rights reserved.

Investment Fund List Mutual Fund Investments 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 © 2016 WageWorks Inc. All rights reserved.

Investment Fund List Mutual Fund Investments 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 © 2016 WageWorks Inc. All rights reserved.

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