Paychex Introduces Health Savings Account Product

Press Release



The newest product offering from Paychex, Inc. is designed to serve as a tax savings tool for employers and employees in a time of rising health care costs. The Paychex Health Savings Account (HSA) is available to Paychex small business payroll clients, as well as clients of Paychex Premier(sm) Human Resources - the company's comprehensive HR outsourcing solution - and Paychex Business Solutions, the company's professional employer organization.



Paychex has created alliances with Affiliated Computer Services (ACS) and Mellon Financial Corporation to offer the Paychex HSA. Paychex collects and remits HSA funds to Mellon Trust of New England, the Paychex HSA account custodian. ACS provides expert account administration and dedicated customer service for employers and accountholders.



Health Savings Accounts were created by the Medicare Prescription Drug, Improvement and Modernization Act of 2003. The accounts allow individuals to save money tax-free to pay for qualified medical expenses now and in the future. Individuals covered by a qualified high-deductible health plan are eligible to enroll in an HSA.



"The HSA integrated with payroll is truly where form meets function. Through payroll integration, the burden of calculations, remittance and compliance is taken off the small business person's hands," said Tony Tortorella, vice president of sales for Paychex Human Resource Services. "Paychex brings simplicity to a very complicated way of funding insurance premiums and deductibles.



"Combining a qualified high-deductible health plan with an HSA will be the foundation for consumer-driven health insurance as we move into the future," added Tortorella. "It satisfies the need to control rising health insurance premiums with the benefit of allowing a consumer to save for the future. In the same way that a 401(k) plan is a great tool to help individuals save for retirement, the HSA can serve as a tool to help fund medical expenses now - and save for those expenses in retirement."



"HSAs represent an important new approach for addressing spiraling health care costs," said Gregg Larson, principal and ACS' National HSA product leader. "We are proud to join with Paychex to deliver a full-service solution to its customers."



A health savings account is owned by the individual, not the employer, so it is portable; if an individual has a change in status including job, medical coverage or marital status, the HSA account remains with the individual. Additionally, there is no time limit for reimbursement of HSA funds. HSA balances roll over from year to year so there is no "use it or lose it" forfeiture rule as in other health care savings vehicles, including flexible spending accounts.



An individual may make contributions to their HSA up to the lesser of their qualified high-deductible health plan deductible or the annual health plan limits for individuals or families, established by the federal government. The figure is adjusted annually for inflation. Additionally, individuals may make "catch-up" or additional contributions to their HSAs beginning the year they turn 55.



For more information about the Paychex Health Savings Account, go to www.paychex.com/products/125payx.html#HSA.



CPE Seminar for CPAs



With the addition of the Paychex Health Savings Account to the company's product offerings, Paychex has also developed a comprehensive seminar on HSAs for accounting professionals. The Continuing Professional Education (CPE) seminar helps accounting professionals determine the value an HSA may provide to their clients. Details are available on the Paychex Web site http://www.paychex.com/acctpros/index.html.