Reimbursement for the $20 HSA rollover fee attributable to the custodian switch from Bancorp to Bank of America will be processed on July 30. The refund will be made in the manner in which you currently are receiving your pension payment. If you receive your pension via EFT, the refund will be deposited to your account on Friday, July 31. If you receive your pension via paper check, the refund will be mailed to your home. (The reimbursement will NOT be deposited to your Bank of America health savings account as previously communicated).
Because this reimbursement will be treated as earnings and taxed, the refund amount will be grossed up to account for federal and state taxes. The net amount refunded to you will be $20. For example, a retiree residing in Michigan that has a state tax rate of 4.25% can expect to see the following:
Gross payment $25.85
Minus Federal tax of 25% ( 5.00)
Minus State of MI at 4.25% ( .85)
Net payment $20.00
Please note that you will receive a W-2 for this payment in addition to your usual 1099-R for tax reporting purposes.
Please send any questions you may have regarding this refund to Ask Ben at AskBen@fcagroup.com.