SIMA proudly provides your company with comprehensive financial services allowing you to focus on your business. Below we have outlined some best practices related to maintaining your company’s employee benefit deductions. These practices are intended to support your existing company procedures and enable your team to find any discrepancies in a timely manner.
As always, please feel free to reach out to your benefits team with any questions you may have at (804) 285-5700 or benefits@simafinancialgroup.com.
Manage & Update Payroll Deductions
You are responsible for maintaining your payroll system and payroll deductions. It is important to develop processes to ensure employee deductions are added, removed and changed accordingly. Each time a new employee is enrolled on your benefit plan, you will need to add the deductions according to the benefits the employee selected. When employee’s benefits change (such as during your healthcare renewal) you will also need to update the deductions appropriately.
Reconcile Plan Participants to Carrier Invoice
Another best practice is to reconcile your monthly carrier invoice to your payroll report. This will ensure all employees participating in your benefits have an associated payroll deduction. This process serves as a check and balance to make sure employees are added and terminated appropriately in the payroll system.
Annual Benefits Renewal
Once your benefits team finalizes your annual renewal, we will send updated insurance rates to update employee deductions in your payroll system. It’s important to take your time to ensure all employees are updated appropriately and their deduction amounts are correct. When employees move from a high deductible health plan (HDHP) to a POS/HMO plan they will no longer be eligible to have an HSA deduction. You will need to make sure to remove the HSA/FSA employee deduction amounts. Please note a health FSA allows employees to be reimbursed for medical expenses in a tax-advantaged way without having to be enrolled in a HDHP. Therefore, employees may elect to continue their FSA payroll deduction after being terminated from a high deductible health plan.
Per Pay Period Reports & Review Processes
It’s also a best practice to implement a comprehensive review process for your payroll reports to help identify and correct any issues that arise. With today’s sophisticated payroll technology, it’s easy to quickly review your payroll and move on to the next item on your to-do list, however, having a review process in place will save you potential future headaches. It is important to always take your time inputting new employees to ensure that they are set up correctly with the correct deduction amounts.
Encourage Your Employees to Review their Paystub
In addition to your review processes as the employer, it’s important to instill the practice of reviewing paychecks to your employees. Many payroll problems could be caught and solved quickly when this process is suggested.
