FREQUENTLY ASKED QUESTIONS

Business Accounts

What type of business account is right for me?

Hilltop bank offers a wide range of commercial services to meet the needs of any business. Generally, the best account type for your business will depend on two main factors. First, what size is your business? Smaller operations that don’t write or deposit a large number of items each month will benefit most from our Business Free 150 or Low Activity account. Larger businesses or those with a significant amount of activity may be better suited for our analysis checking or sweep accounts. Secondly, how important is it that you receive images of your checks with your monthly statements? This feature is included on the Low Activity and Analysis Checking accounts but not on the Business Free 150. For more detailed information, please contact the Hilltop Bank Client Relationship Management department.

What other business services do you offer?

We want to be the single source for all of your business needs. Whether it’s business online banking, payroll services, debit and credit card merchant accounts, or commercial loans, we have a wide range of business solutions with the expertise to assist you every step of the way. Please contact Hilltop Bank for more details.

What do I need to bring with me when I open an account?

The requirements to open a business account vary depending on the business type. For a sole proprietor, all that is required is the business owner’s personal information including name, date of birth, social security number and a valid photo ID. For a partnership, we require a copy of a written partnership agreement and the partnership’s Federal Tax ID Number (TIN) available from the IRS. For other business types such as Corporations and Limited Liability Companies (LLC), we require a copy of the articles of organization showing the current officers or members as well as the Federal Tax ID Number. Please note that we may be required to obtain identification for each signer on a business account as required by the US Patriot Act. For more details, please contact the Hilltop Bank Client Relationship Management department.

Cafeteria Plans

What are the benefits of a Section-125 Cafeteria Plan?

When employees pay for out-of-pocket medical expenses, daycare and group health insurance premiums pre-tax it saves them money. Benefits are deducted pre-tax, therefore employees do not pay federal income tax or Social Security and Medicare taxes on amount redirected through a cafeteria plan. This enhances the overall benefit package and is used as an employee retention tool. Employers also save on matching FICA taxes.

Who can participate in a Section-125 Cafeteria Plan?

Benefits can be made available to employees eligible for the employer’s group health plan including spouses and dependents. Generally, self-employed persons, partners and 2% Subchapter S shareholders are ineligible to participate.

What benefits can be included in a cafeteria plan?

Group-sponsored health, dental, vision and other select insurance premiums, childcare expenses and out-of-pocket medical expenses.

What are the fees for a Section-125 Cafeteria Plan?

In order to meet IRS and ERISA compliance requirements, your plan must be in writing. Hilltop Bank will supply you with the necessary documentation to meet these requirements. We charge a one-time set-up/document fee and a monthly plan-processing fee.

What pre-tax accounts and benefits are available?

  • Premium Payment Account - also called POP or “Premium Only Plan”
    • Tax savings on insurance premium payroll deductions
  • Medical Flexible Spending Account
    • (see Section 213(d) for detailed listing of eligible expenses via IRS.gov)
  • Dependent Flexible Spending Account
    • Reimbursement on qualified childcare expenses tax-free
  • Average savings are 20% – 40%!!

How much can an employee contribute to a Flex Reimbursement Plan?

The Medical Flexible Spending Account maximum is at the employers discretion (within IRS limits) with the exception of Dependent Care, which is a predetermined amount set by the IRS. For Dependent Care Reimbursement Accounts, the IRS allows you to elect a maximum of $5,000 a year.

How are expenses reimbursed?

Employees may:

  • Submit manual claims forms via post, fax or email
  • Online submission via participant portal
  • Mobile submission via mobile app
  • Debit Card payment

How often are claims reimbursed?

Reimbursements can be issued daily, weekly or monthly as determined by the employer/plan sponsor.

What is myRSC.com?

  • Participant Portal: Employees may check account balances, view claims and account activity, and print claim forms online by logging onto www.myRSC.com. They may also call Hilltop Bank and speak to a representative, or review reimbursement stubs.
  • Employer administrative portal for employee maintenance, reports and forms.

Health Reimbursement Arrangements

Who is eligible to participate in an HRA?

Only employees enrolled in a compliant group health plan with minimum essential coverage (MEC) as stated by the ACA (learn more about minimum essential coverage here IRS.gov. Self-employed, partners, and 2% Subchapter S shareholders are generally ineligible.

What are Common Plan Designs Employers use?

  • Unrestricted - All qualified out-of-pocket Section 213(d) medical expenses are eligible for reimbursement incurred by the employee or employee’s family covered under the Employer’s ACA compliant group health plan. Unspent balances may carry-over from year to year. Significant balances can be accumulated.
  • Deductible Only or Deductible, Co-Pay and Co-Insurance - All medical expenses that are applicable to the health plan's deductible qualify for reimbursement. This plan design may or may not include co-pays or co-insurance amounts. It's the employer's choice.
  • Specific Expenses Only - Plans may be designed to cover dental expenses only, orthodontia expenses only, vision expenses only, prescription medical expenses only, and/or other specified expenses.
  • QSEHRA - In recent years, Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs) were signed into law benefiting small employers. Small employers with fewer than 50 full-time employees and who do not have a group health plan may offer a QSEHRA. Employees can use this unique HRA to be reimbursed for qualified medical expenses AND individual health insurance premiums. Individual health insurance must be ACA compliant and have MEC (see above). Here's a few other QSEHRA facts:
    • Contribution limits for a single employee is $5,050 and $10,250 for those with family coverage.
    • Unspent balances cannot carry over to the next year.
    • Employers must include amount of QSEHRAs on employee’s W-2.
    • Employees must provide proof of coverage and notify HealthCare.Gov of their QSEHRA if insurance is purchased on the marketplace exchange and receiving a premium tax credit. Employees may be subject to taxes on the HRA if they fail to maintain health coverage. For more information on a QSEHRA go to IRS.gov.

How are expenses reimbursed?

Employees may:

  • Submit manual claims forms via post, fax or email
  • Online submission via participant portal
  • Mobile submission via mobile app
  • Debit Card payment

How often are claims reimbursed?

Reimbursements can be issued daily, weekly or monthly as determined by the employer/plan sponsor.

What is myRSC.com?

  • Participant Portal: Employees may check account balances, view claims and account activity, and print claim forms online by logging onto www.myRSC.com. They may also call Hilltop Bank and speak to a representative, or review reimbursement stubs.
  • Employer administrative portal for employee maintenance, reports and forms.

How much can an employee contribute to an HRA account?

None. Only employers may fund this account. Generally, if an employee is eligible under the employer’s group sponsored health insurance plan, they will receive a contribution into an HRA account. HRAs work very well with high deductible health plans.

How much should an employer contribute to each HRA account?

HRAs are flexible. Employers choose how much to contribute.  These contributions are sent to Hilltop National Bank and each employee account is funded.

What are the tax advantages of an HRA?

Employees will not be taxed on the value of their HRA. The employer will, subject to certain conditions and limitations, be entitled to a deduction for contributions made under the HRA.

Can an employer contribute different amounts for different employees?

Generally, no. An HRA must not discriminate in favor of highly compensated employees and must not base contributions on compensation, age or years of service. However, employers may set in writing who is and who is not eligible for the HRA.

Can an HRA be used for Individual Insurance Premiums?

Almost always NO. With the exception of a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)- see above section.

What are the benefits of an HRA?

Employers can decrease group health insurance premiums by increasing deductibles while helping employees to cover costs and fill the gap. HRAs are flexible, and employers can design an HRA to meet their unique needs. Depending upon the plan designs, balances may be rolled from year to year.

What are the fees for an HRA?

In order to meet IRS and ERISA compliance requirements, your plan must be in writing. Hilltop will provide the necessary documentation to meet these requirements. Plan set up, document and monthly processing fees apply.

Can an Employer have an HRA and a Section-125 Cafeteria Plan?

Yes, and that is a great strategy to maximize the benefits.  Discuss with us to determine the appropriate plan design to meet your needs.

Health Savings Accounts

What is a Health Savings Account (HSA)?

Health Savings Accounts (HSAs) were created in the Medicare Prescription Drug, Improvements, and Modernization Act of 2003 signed by President Bush on December 8, 2003. An HSA is a 100% tax-deductible savings account used to pay for qualified medical expenses. (see Section 213(d) for detailed listing of eligible expenses IRS.gov). Any unused amounts will earn interest and roll over from year to year.

Who qualifies to have an HSA?

To receive a tax deduction for contributions to an account, an individual must be:

  • Covered under a qualified high deductible health plan (HDHP)
  • Not covered by any other health plan that is not an HDHP
  • Not currently enrolled in any Medicare benefit
  • May not be claimed as a dependent

What is a High Deductible Health Plan (HDHP)?

A qualified high deductible health plan is a health insurance plan that meets the following requirements:

  • HSA deductible requirements for 2019
  • Minimum deductible $1,350 for single
  • $2,700 for family
  • Maximum out-of-pocket $6,750 for single
  • $13,500 for family

How much can I contribute to my HSA?

Any eligible individual, employee or employer may contribute and receive a tax deduction for contributions made up to the statutory limits of $3,500* for an individual or $7,000* for family coverage for the entire 2019 year. Contribution limits are tax deductible and eligibility is calculated on a monthly basis. In addition to maximum contribution amount, catch-up contributions may be made by or on behalf of individuals over the age of 55 (2019 indexed amount is $1000*).

*Information summarized from IRS Rev. Proc. 2018-30

How often can HSA contributions be made? Is there a deadline?

After an HSA is established, the maximum annual HSA contribution can be made anytime, at any frequency after the start of the tax year through the account holder’s tax filing deadline (without extensions). Therefore, an account holder can make contributions for a prior year up until he/she files their taxes or April 15th.

How can account holders spend HSA money?

Hilltop Bank provides a free starter checkbook and a Visa debit card to pay for qualified medical expenses. After your account is opened, you will receive your Visa debit card within 7-10 business days and it may be used anywhere Visa is accepted. Account holders will receive monthly statements and can access account information online.

Are distributions from an HSA taxed?

Distributions from an HSA are tax-free and excluded from taxable income if used for qualifying medical expenses incurred by the account holder, spouse or tax-dependent. The account holder should be prepared to pay taxes AND a 20% excise tax on distributions used for non-qualifying medical expenses. An exception is made after the account holder attains age 65.

Can an HSA be offered under a Section-125 Cafeteria Plan?

Yes. Once the employer has established a qualified Section 125 Cafeteria plan, an employee may elect to have their HSA contributions deducted from their paycheck on a pre-tax basis, meaning they do not pay federal income tax or Social Security and Medicare taxes on amounts redirected through a cafeteria plan.

Can my HSA account earn interest?

Yes, and any interest earned is tax-free.

What are the responsibilities and tax reporting requirements?

As required by the IRS, account holders must be able to substantiate all distributions. It is the account holder’s responsibility to maintain the account, determine whether he or she is eligible for HSA Contributions, and ensure HSA distributions are used for qualified medical expenses.  Account holders must report their HSA information on IRS form 8889. Hilltop National Bank is also required to report contributions and distributions to the IRS.

Chip Cards

What is a Chip Card?

A chip card—also known as an EMV card—is your financial institution’s way of adding an extra layer of security when you pay. Chip cards can be used anywhere your other cards are used, but the chip functionality only works at a business that has an activated chip-enabled terminal.

Why are Chip Cards more secure?

The chip generates a unique, one-time code each time you dip your card at a chip-enabled terminal. Your purchase can only be approved with the chip-generated code. The chip in your card is virtually impossible to duplicate. That means attempts by a fraudster to create and use counterfeit cards will be much harder

How Do I Use It?

Insert your card into the chip-enabled terminal with the chip first, facing up. Leave the card in the terminal until the transaction is complete. You may be prompted to sign your name. If there isn’t a chip-enabled terminal, use the card the traditional way and swipe.