When it comes to managing your myHSA account, selecting the right funding method is crucial for aligning with your company’s financial goals and processes. myHSA offers two main funding options: Pay As You Go and Prefund, each designed to accommodate different business needs. Here’s a breakdown of how these methods work and their benefits.
Pay As You Go (The Most Popular Method)
The Pay As You Go model is the default funding method for myHSA. Under this approach:
How it Works: The company funds the plan as employees make claims. (No other fees, just based on utilization alone!)
Bank Files: Claims approved during the week are batched and processed twice weekly, on Wednesdays and Fridays. Payments, including administration fees and applicable taxes, are then withdrawn from the corporate bank account on the same day.
Notifications: Plan Administrators receive email notifications for withdrawal reconciliation, ensuring transparency and easy tracking.
This method provides a straightforward funding option, ideal for smaller teams or those preferring real-time payment alignment with claims activity.
Prefund (Available for Larger Groups)
The Prefund model is an alternative designed for groups that meet the following criteria:
A total company allowance exceeding $5,000.
More than 10 employees covered under the plan.
Key Features:
Flexible Prefunding Schedules:
Choose from annual, quarterly, or monthly funding schedules.
Prefund Amount:
Calculated as Projected Claims + Admin Fees + Taxes.
Projected claims are based on 80% of the total company allowance.
End-of-Year Reconciliation:
Any surplus (unused funds) can be refunded or allocated to the following year’s prefund amount.
In cases of a deficit (claims exceeding the prefund), a one-time withdrawal will cover the balance.
The Prefund option offers predictable funding, making it an excellent choice for larger organizations looking to streamline financial planning and minimize transactional activity.
Additional Resources for Plan Administrators
Did you know myHSA provides tools to make your plan administration even smoother?
Custom Accountant Profiles: Enable your accountant or team to have “Reports Only” access if you don't want them having standard access - this is just a reports running account!
Custom Email Distribution: Withdrawal emails can be sent directly to your accountant’s inbox, keeping them informed and streamlining communication.
Choosing the right funding method ensures your HSA plan operates efficiently while meeting your organization’s specific needs. If you’re interested in setting up your account with a different funding method, reach out to support@getmyhsa.com for guidance and support.