Adjusting Deduction Cap Amounts

Instructions for adjusting deduction cap amounts at the employee level to avoid over-contribution to HSA and FSA plan types.

If you would like to take proactive measures to prevent your employee(s) from over-contributing to HSA and FSA plan types, we recommend adding a cap amount to the deduction on their Payroll profile.

To add a deduction cap:

  1. In Namely Payroll, go to Reports > Date Range and pull a Payroll Register (Excel) Report for the 2020 calendar year.

  2. Filter the report for anyone with employee and/or employer contributions to an HSA deduction.

  3. Determine the cap amount that should be entered by subtracting the employee’s (and employer’s, if applicable) YTD contributions from the IRS HSA/FSA contribution maximums.

    • For individual HSAs, the maximum is $3,550 ($4,550 if over the age of 55).

    • For family HSAs, the maximum is $7,100 (or $8,100 if over the age of 55).

    • For FSAs, the maximum is $2,750 ($500 rollover without grace period).

    • For Dependent Care FSAs, the maximum is $5,000.

  4. In Namely Payroll, click Employee.

  5. Use the search function to search for the at-risk employee(s) and load their Payroll profile.

  6. Click Deductions. Find the impacted deduction and click Edit.

  7. Enter the previously determined cap amount in the Annual Maximum field(s). 

    • If the HSA/FSA account receives both employee and employer contributions, the previously determined cap amount must be split between the Employee Cost and Employer Cost sections.

  8. Click Save.