Employee designates a dollar amount to have deposited to an HSA account with every payroll (pretax). Payroll is deposited to employee checking account as of payroll date. The HSA funds are deposited to the bank where the employer as set up the HSA accounts but are delayed for 3 - 5 days following payroll. The employer switched banks from the one used in 2020. Previously the HSA deposit was effective the same date as payroll. The HSA bank the employer started using in 2021 says it is standard to have a delay. This was the response:

• The standard time frame for Employee’s HSA contribution to be deposited into their account is 3-5 business days after the file feed has been sent to HSA Bank. File feeds are sent Tuesday's and Friday's.
• The standard time frame for HSA Employer contributions deposits take 3 to 5 business days from the Payroll in which the Employer contribution was charged

This does not seem correct... but I do not know ACH rules. Thoughts?

To me this is just an ACH file being sent through the normal course of business. If the originating bank is not sending the ACH file out prior to the payroll date then this could be where the issue is.

Employer sends file to the payroll processing company 2-3 business days before the payroll is paid to employees. The file includes payroll funds and HSA funds. The payroll processing company handles (processes) the direct deposits. Payroll is deposited as of payday. The HSA deposit is delayed 3 - 5 days.

A couple of things to check out -- what's the effective date or settlement date of the HSA credits? There could be something in the payroll software that makes that date a few days after payday so the employer can "sit" on the funds for a couple of days.

The other thing is the practices of the HSA-holding bank.