Accounting for HSA contributions and distributions
Hi - I'm having difficulty figuring out how to handle an employee's HSA in QB Online due to a recent chance in the structure of the HSA. Prior to April, we had a HSA that was managed by Intuit. The HSA contributions are done through QB Payroll and the funds went into a liability account. Once per month, Intuit deducted the contributions from our account and that was recorded as an expense. Intuit managed the HSA balance and I never saw the usage side of the HSA nor the balance of the account. It was simply a monthly expense for us. However, in April, Intuit transferred the management of the account to another company and this new company does no maintain the HSA account themselves. Instead, they returned the unused balance to us and I am now attempting to manage that balance as we still make monthly contributions but now also are impacted each time the employee uses their HSA. So far, I've set up a sub account off of our checking account to manage the HSA balance. Once per month I do a transfer from parent account to the sub account to reflect the contributions to the HSA. This, however, does not allow me to track the contributions as a payroll expense as we did previously when the funds were deducted by Intuit. Should I be doing this another way? Also, assuming those contributions can be tracked as an expense some other way, how should I account for the deductions resulting from the usage of the HSA? It doesn't seem like that should be an expense also otherwise I'd be double counting expenses - once for the contribution to the HSA and one for the employee purchase of healthcare needs. Thanks in advance for any assistance with this!
