The Wellness Spending Account (WSA) reimbursement freeze feature offers an efficient solution for employers to manage year-end payroll and tax obligations. By setting a specific cut-off date, employers can freeze WSA claim reimbursements, which allows payroll teams to properly categorize these expenses as taxable benefits for the following year. Here’s a step-by-step guide on how to set up the WSA claim payout freeze over year-end:
Access the Company Profile
Begin by navigating to your "Clients" tab.
Select the name of the company for which you want to implement the reimbursement freeze.
Locate the WSA Plan
Within the company's profile, go to the "Plans" section.
Find the WSA you want to apply the freeze to, and click the pen icon beside it to access its settings.
Enable the WSA Reimbursement Freeze
In the plan settings, turn the "WSA reimbursement freeze" feature on.
Choose the date you want the freeze to begin. For example, select a cut-off date towards the end of the year.
Impact of the Freeze
Once the freeze is activated, any claims submitted the day of or after the cut-off date will be held until the first bank file in January (for this year, that lands on January 1st which is a holiday, so the transaction would be pushed to January 2nd 2025). For example, if you enacted the freeze with a start date of Dec 16th, 2024, then any claims that are approved or submitted Dec 16th or later will be held in the freeze until January 2nd, 2025.
Employees will still be able to submit claims as usual, but they will receive a notification informing them that any claims submitted during the freeze period won’t be reimbursed until the new year. These held claims will also be recorded as taxable benefits for 2025.
By following these steps, you can ensure a smooth transition through year-end while allowing the payroll team sufficient time to handle taxable benefit allocations accurately. Questions about the freeze? Reach out to us at support@getmyhsa.com