Payroll codes are required when using the integrated payroll product. Deduction codes should be "mapped" from payroll. This means that the corresponding code that already exists in payroll for a deduction needs to be added to a plan in Employee Navigator. Payroll codes are important because they allow us to create Recurring Deduction records for an employee based on their enrollment. Payroll codes are used in our payroll deduction API that allows us to send new, update, and end deductions for an employee.
How do “Coverage Level Based” codes work?
We will only show the coverage levels that have rates configured under the benefit. For example, if the rates in a plan are configured for the employee, employee + spouse, employee + child, employee + family the expectation is that only those four coverage levels will appear under the plan in the payroll group to be populated with deduction codes.
If the rates change, the coverage levels will be dynamically updated under the payroll group. It’s important to note, that you must click into the module to see changes to coverage levels when rates are updated. The module needs to open for us to use the logic to pull the new rates. That means that when you first click into the payroll page after an update, you will not see the updated values until clicking into the module.
Coverage level codes MUST be unique. If a group is using “Coverage Level Based” codes then we will enforce this uniqueness. For example, you cannot have the ee+sp and the ee tier be the same code. If we allowed for this, then the last updated value would win and we would not properly be ending plans.
We do not support tiered deductions for ACA or individually banded plans. They are only supported for Composite or banded plans.
Prior to setting up your payroll codes you need to determine if you are using "Plan Based" or "Coverage Level Based" codes.
When a plan has “Plan Based” selected then no matter the coverage level an ee is enrolled in, the same deduction code will be sent to payroll. When a plan has “Coverage Level Based” selected, then this group is using tiered deductions to report coverage to payroll.
If you want to configure "Plan Based" codes for all of your benefits, then navigate to an established Payroll Group>Deduction Codes. Enter the appropriate deduction codes for your plans based on what is entered in payroll. You need to click "Edit" next to the appropriate plan to bring up a modal and enter the appropriate codes. Be sure to click save!
If you want to configure "Coverage Level Based" codes for all (or some) of you benefits, then the following steps need to take place.
- Click into an established payroll group>Advanced Deduction Accruals> Select a file Type (this isn’t used but you need to select it to configure tiered deductions)> Select Payroll Codes based on Coverage Level>Save.
- Navigate back to the Deduction Codes page within a payroll group, and select "Edit" next to the appropriate plan.
- Within the Plan a drop-down is presented to have codes configured that are “Plan Based” and “Coverage Level Based.” Select "Coverage Level Based.
Whether you are using "Plan Based" or "Coverage Level Based" codes, the codes and transmission options need to be configured so that a payroll group can be “Complete.” This means that codes need to be entered for all plans that have the transmission configuration of “Always Send” and “Don’t send 0s.” If a plan is using “Coverage Level Based” codes than a code needs to be entered for every coverage level.
A company has tiered deductions for their medical plans. The rates that are configured for that plan employee (Code = MEDEE), employee + spouse (Code = MEDS), employee + child (Code = MEDC), employee + family (MEDF). The unique codes have been entered for each one of these plans so that when an employee enrolls in a tier it will be sent to payroll. Deshaun Watson is hired 5/25/2018 with a medical plan effective date of 7/1/2018. He enrolls in medical coverage with his wife. Once he has completed his enrollment a payroll transmission is sent to payroll with the MEDS code and a per pay cost of $54.12.
On 9/15/2018 Deshaun and his wife has a baby. Deshaun enters a life event in Employee Navigator effective 9/15/2018 and adds his child to his medical coverage. His coverage tier changes from employee + spouse to employee + family. With this life event, a payroll transmission is triggered to payroll ending the MEDS coverage effective 9/14/2018. Another transmission is sent to payroll with the MEDF code with the effective date of 09/15/2018.
Coverage Level Based Codes for Vol Life Plans
We allow to have separate deductions written for vol life plans so that the ee cost, the spouse cost, and the child cost could all be communicated separately to payroll.
Writing separate deductions is only available for the vol life plan model with the traditional rate structure. For a vol life plan with a traditional rate structure, we will only show "for Employee, for Spouse, and for Children" coverage levels that will be written separately. For a composite or family rate basis with “Coverage Level Based” selected, we will always show 5 tiers: ee, ee+spouse, ee+child, ee+child(ren), and ee+family.
Example 1: EE and SP enrolls in Vol Life Plan
Company has a Vol Life plan with a traditional rate structure and is using "Coverage Level Based" codes for deductions. The coverage level codes are VLEE, VLS, VLC. This means that three tiers will be configured, and each cost will be sent separately to payroll based on an employee's enrollment. Sammy Watkins and his wife enroll in coverage effective 5/1/18 with the ee cost = $23.22 and the spouse cost = $10.44. After Sammy has completed enrollment, he and his wife will have a separate deduction written and sent to payroll as separate transmissions. On the transmission dashboard you will see the VLEE code sent with a $23.22 cost and a VLS code sent wtih a $10.44 cost. Those deductions will also be reflected separately on the ees data sheet.
Example 2: EE and SP enrolled, change in GI for the EE
Sammy and his wife have already elected vol life coverage (traditional rate structures). A separate deduction has been written for the ee and the spouse and two separate transmissions have been sent to payroll. EE has a change to GI that increases the cost for the ee. A new transmission is sent to payroll should be sent to payroll reflecting the new cost and effective date. No change is made to the sp cost so no transmission is sent to payroll.