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How to set up an FSA, HSA, Medical Care, Adoption Assistance or Dependent Care

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Summary

How to set up a Health Savings Account, Dependent Care, Medical Care and/or Adoption Assistance. Includes setting up different general ledger (GL) expense accounts for different employees.

Resolution

Section 1: Setting Flexible Spending Account Employee Default

  1. Select Maintain, Payroll, and then click Payroll Settings.
  2. Select Benefits, and then click Summary of Benefits.
  3. Click Add Another Benefit button.
  4. Select Flexible Spending Account, and then click OK.
  5. Select type of FSA plan to setup up
    • Medical Care
    • Dependent Care
    • Health Savings Account
    • Adoption Assistance
  6. Select the appropriate option for who contributes to the plan.

    Note: If the company contributes a flat dollar amount to the plan, you can specify a contribution amount after indicating your selection or continue and return later to specify an amount or formula if you have created one.
  7. Click Next.
  8. Select the tax settings for either taxable or non-taxable for Employee Taxes and Company Taxes, and then click Next.
  9. Select the GL Accounts for Employee, and then click Next.
  10. Select the GL Accounts for Company, and then click Next.
  11. Click Finish.

Section 2: Use a different FSA expense account for different employees

Section 3: Company paid benefit with Employee witholdings (Complete Section I before proceeding)

  1. Go to Maintain, Default Information, then Employee.
  2. Select Employee Fields.
  3. Find the first blank line and enter a Field Name; this must begin with a letter and can contain no spaces or special characters except underscores.
  4. If the field is a record-only field, check Memo ***Memo fields let you track information without making any general ledger entry or calculation***
  5. Select the G/L Account(s) to be used.
  6. Enter the amount of the employer contribution in the Amount column.
  7. Click the Adjust button for the tax item the benefit will be pre-tax for.
  8. On the Define adjusted gross for the tax payroll field, locate the company field name for the benefit deduction and clear Use column.
  9. Click OK to save the change.

***Repeat last 3 steps for each tax that will be pre-tax***