So you’ve come to the end of another Plan Year, and you now have the task of updating your employee Health Benefit records. The existing records should accurately portray the dates your employees were covered in the assigned Medical Plans. And you may also need to make deduction amount changes on a wholesale basis for all enrolled employees. If you are among those few whose Medical Plan has stayed the same, and you also did not have to make any changes in Payroll deduction amounts, count yourself considerably blessed.
For the rest of you, one of the following scenarios is probably true: Either your payroll deduction amounts have changed for the New Plan Year, the 1095-C code has changed, or the Plan itself has changed. If you are simply updating the existing Plan with new payroll deduction rates, this is relatively simple and can be accomplished by following the instructions under Scenarios 1 or 2 of the article found at this link: https://datatechag.com/updating-health-insurance-deductions-for-2016/
The rest of the information in this post is for those who have to deal with the setup of completely new Medical Plans, deactivating existing records showing the old Medical Plan, and at the same time creating new, Active Benefit records showing the new medical Plan. If the 1095-C code for your existing plan changes, you cannot simply go into your setup window and change the code on an existing Medical Plan. The old Code needs to remain for historical documentation purposes, and you will need to set up a new Medical Plan by copying over all the other settings from the old Medical Plan (except the old 1095-C Code). Naturally you will also need to set up a new Medical Plan if your Plan is entirely new for the upcoming Plan Year.
Whenever you need to process Health Benefit records on a wholesale basis to reassign employees to a different Medical Plan, you can follow the instructions shown below. Please note that there are different instructions depending on the Method you are using to calculate Eligibility for enrollment.
If your Plan Year ends on a month other than December 31, apply the instructions below nominally to your unique Plan Year dates. If you feel the changes you need to make to your records are not completely addressed in this article, please send us specific questions about your situation to: hrsupport@datatechag.com
As you may have noticed already, making extensive, wholesale changes to the Health Benefit records can be a daunting and tedious task, especially if you have numerous Health Benefit records that need to be processed. But Datatech has made a new Utility available with the latest update to greatly assist you in accomplishing these necessary records changes. It is found under the Health Insurance menu, Utilities option, and called “Deactivate/Switch Plan Enrollment.” Choosing this option will bring up the following window:
If I am using the Monthly Method:
PLEASE NOTE: Before you start changing Health Benefit records, you must first process your final payroll that is controlled by the Health Benefit records for the Current Medical Plan. The week that you process this payroll may change depending on what criteria your software is using to Calculate the Week of the Month. Some Datatech customers have their software set to use the ending date of the pay period to determine what week of the month it is, while others use the Check date to make that calculation.
For example: If your Plan Year begins January 1, 2018, and you are processing payroll for the week ending December 30 or 31, 2017, the check date will probably be sometime during the first week of January. But because the pay period ends in December, the software may be set to consider this a December check, which means the Current Plan Year deduction rates will be taken. Conversely, the software may be set to use the Check Date to calculate which week of the month it is, which means it will be looking to take the New Plan Year deduction rates.
In view of this example, the following steps need to be carefully timed so that you do not make this change too soon or too late. First, determine how your software is Calculating the Week of the Month. Have someone with Administrator rights go to the Tools menu and choose the Program Setup option. On the Payroll tab, look in the third field from the bottom of the far left column marked: “Week of Month Calc. Basis:.”
If the setting is “Ending Pay Period Date“, then you will wait until after the payroll for your last pay period of December has been processed before performing the following steps. If the setting is “Check Date: (Day of the Week you cut checks)“, then the following steps must be completed before you process the first payroll with a January Check Date. Carefully select a date, one that lies in-between your last December Check and your first January check, on which you will perform the next steps.
If you have a sizable amount of existing Active Benefit records for the old Plan that need to be deactivated, go to the Deactivate/Switch Plan Enrollment utility. Select the Current Medical Plan using the Plan lookup menu. Enter the last date of the old Plan Year in the Enrolled Through: field.
NOTE: This ending date will likely match the Ending coverage date on most, if not all, of the Active records for the Current Plan. Please ensure that none of the Health Benefit records for the Current Plan have Ending coverage dates that go beyond the Plan Year ending date. This will ensure the correct 1095-C code gets reported on your IRS Information Return, and that the correct deduction amount(s) will be taken from employee payroll checks.
Next, you can choose one of the radio buttons to either Deactivate the current enrollment or Deactivate and enroll in new plan. If you choose the first option, you will simply be deselecting the Active check box on all of your current Health Benefit records. If you choose the second option, you wil both deactivate old Health Benefit records and create new Health Benefit records.
Option 1: Deactivate the current enrollment
Using the first radio button will only deactivate the existing Active Health Benefit Records, after which you would then use the Hour Eligibility Report to create your new Active Health Benefit records. Before you Start the utility, go to your Medical Plan Setup, use the Lookup to select the Current Plan, uncheck the Default Plan check box (if applicable), and click Save. Then use the Lookup again to select the new Plan, select the Default Plan check box (if applicable), ensure you have entered all of the new Flat or Age Rates for the New Plan Year, and click Save. Now return to the Deactivate/Switch Plan Enrollment window, click the Start button, and wait for an acknowledgement that the process of deactivating your Old Plan records has completed.
Next you can use the Hour Eligibility Report to create all of the New Plan records. Open the Hour Eligibility Report window and enter the Ending Date: 12/31/2017. Check the Update Hours/Status and the Create/Update Benefit Records check boxes. If any other check boxes normally apply to your circumstances, select them and click Preview to run the Report.
This will create all-new Active Health Benefit Records for only the eligible employees. It will assign them to the New Default Plan, and create the new payroll deductions using the rates you have setup in the new Medical Plan. Now verify that the New Rates are deducted from your first January payroll before printing your checks. From this point on you may continue running your Hour Eligibility Reports each month throughout the remainder of the Plan Year as you normally would.
Option 2: Deactivate and enroll in new plan
If you chose the second radio button to Deactivate and enroll in new plan, this activates the New Plan Settings section of the window. You can now select the New Plan using the lookup menu. Before you Start the utility, go to your Medical Plan Setup, use the Lookup to select the Current Plan, uncheck the Default Plan check box (if applicable), and click Save. Then use the Lookup again to select the new Plan, select the Default Plan check box (if applicable), ensure you have entered all of the new Flat or Age Rates for the New Plan Year, and click Save.
Now return to the Deactivate/Switch Plan Enrollment window. Enter the Start Enrollment date, which should be the first day of the New Plan Year. Then in the Enroll through section of the window, you should only select the End of month radio button. Click the Start button, and wait for an acknowledgement that the process of deactivating your old records and creating new matching records (for all of the same employees) has completed. Now verify that the New Rates are deducted correctly from your first January payroll before printing your checks. From this point on you may continue running your Hour Eligibility Reports each month throughout the remainder of the Plan Year as you normally would.
How do I know which Option to choose?
The decision of which Option you choose will likely depend on your unique enrollment/eligibility situation. Option 1 only applies to the Monthly Method. If you do not know how many Health Benefit Records will need to be re-created for the New Plan Year (or if any will need to be) then Option 1 will likely work best for your situation. It allows the Hour Eligibility Report to determine which Health Benefit Records, if any, get created for the New Plan Year, which means that no records will be accidentally created for an employee who is no longer eligible for coverage.
However, if you are absolutely sure that ALL of the Current Health Benefit records need to be re-created for the New Plan Year, then choosing Option 2 would likely work best for your situation. This means that either you already know in advance that the Currently enrolled employees will ALL need to be re-enrolled in the New Plan Year, or that you don’t mind if an employee accidentally receives coverage for which he is no longer eligible, or that you plan to manually edit the records later for any employee who is no longer eligible.
If I am using the Lookback Method:
There are a few differences in the steps involved when using the Lookback Method. Similar to the Monthly Method, PLEASE NOTE: Before you start changing Health Benefit records, you must first process your final payroll that is controlled by the Health Benefit records for the Current Medical Plan. The week that you process this payroll may change depending on what criteria your software is using to calculate the Week of the month. Some customers have their software set to use the ending date of the pay period to determine what week of the month it is, while others use the Check date to make that calculation.
For example: If your Plan Year begins January 1, 2018, and you are processing payroll for the week ending December 30 or 31, 2017, the check date will probably be sometime during the first week of January. But because the pay period ends in December, the software may be set to consider this a December check, which means the Old Plan deduction rates will be taken from the first check dated in January. Conversely, the software may be set to use the Check Date to calculate which week of the month it is, which means it will be looking to take the New Plan deduction rates from the first check dated in January.
In view of this example, the following steps need to be carefully timed so that you do not make this change too soon or too late. First, determine how your software is calculating the week of the month. Have someone with Administrator rights go to the Tools menu and choose the Program Setup option. On the Payroll tab, look in the third field from the bottom of the far left column marked: “Week of Month Calc. Basis:.”
If the setting is “Ending Pay Period Date“, then you will wait until after the payroll for your last pay period of December has been processed before performing the following steps. If the setting is “Check Date: (Day of the Week you cut checks)“, then the following steps must be completed before you process the first payroll with a January Check Date. Carefully select a date, one that lies in-between your last December Check and your first January check, on which you will perform the next steps.
Before you Start the utility, go to your Medical Plan Setup, use the Lookup to select the Current Plan, uncheck the Default Plan check box (if applicable), and click Save. Then use the Lookup again to select the new Plan, select the Default Plan check box (if applicable), ensure you have entered all of the new Flat or Age Rates for the New Plan Year, and click Save.
If you have a sizable amount of existing Active Benefit records for the Current Plan that need to be deactivated, go to the Deactivate/Switch Plan Enrollment utility. Select the Current Medical Plan using the Plan lookup menu. Enter the last date of the current Plan Year in the Enrolled Through: field, after which you should only select the second radio button to Deactivate and enroll in new plan. This activates the New Plan Settings section of the window, and allows you to select the New Plan from the lookup menu.
Next, enter the Start Enrollment date, which should be the first day of the New Plan Year. Lastly, in the Enroll through section of the window, you should only select the Original enrollment ending date radio button. Click the Start button, and wait for an acknowledgement that the process of deactivating your old records and creating new matching records for all of the same employees has completed.
If any of the Current records had Ending coverage dates beyond the end of the Plan Year, those same Ending coverage dates will be populated in the New records. If the Ending coverage dates in the Old records were the same as the Plan Year ending date, then the software will populate the Ending coverage date on the New records with the next Stability Period Ending date. Now verify that the New Rates are deducted correctly from your first January payroll. From this point on you may continue running your Lookback Eligibility Reports each month throughout the remainder of the Plan Year as you normally would.