Health Benefit Deduction Adjustment Summary for MAP Transition
Prepared by: Payroll Services
Health Benefit Paycheck Adjustments – Exceptions to MAP Processing
Agencies can no longer request adjustments for health benefits (GHI, FSA, HSA) in SHARP. However, agencies can submit DA-180’s centrally to process the following health benefit adjustments as exceptions only:
- Employees who pre-pay health insurance for a pay period where they have no pay
- Termed employees who had an erroneous deduction on their last paycheck.
Health Benefit Adjustments/Refunds Processed Through MAP
Except for the two scenarios listed above, health benefit adjustments and refunds will be processed in the on-cycle for the pay period received from the MAP system as long as the employee has a paysheet created. When an employee has a change in coverage that is recorded in MAP, the increase or decrease in the premium amount for the previous applicable pay periods will be processed in the on-cycle. For employees who do not have a paycheck, the deduction amounts will accumulate until the pay period in which the employee has a paysheet created.
KPAY228 MAP Health Benefit Adjustments and Refunds Report:
A new bi-weekly payroll report (KPAY228-MAP Health Benefit Adjustments and Refunds) has been developed for agencies to review employee health benefit adjustments (ADJ) and refunds (REF) that are sent from the COBRAGuard MAP system to SHARP. Only employees who have either a health benefit adjustment or a refund for the pay period, along with any other regular (REG) health benefit deductions the employee may have, will be listed on the report. These health benefit employee deductions/employer contributions will be processed on employee paychecks for the current pay period as long as the employee receives a paycheck for the pay period. Agencies can use this report as a tool for contacting employees and working arrearages in advance of issuing their paychecks.
ADJ/ADV – Establishing Arrearage to Collect Health Benefit Adjustments Over Multiple Periods:
Agencies can enter an ADJ or ADV on the employee’s timesheet in the amount of the adjustment if the employee has an accumulation of health benefit deductions for multiple pay periods that were not previously deducted due to a paysheet not being created.
- ADJ would be used for all after-tax deductions that were not taken in previous pay periods due to no employee paysheet.
- ADV would be used for all before-tax deduction adjustments where the employee had a paysheet.
Agencies are reminded that any arrearages established for benefits deductions should be collected over the same number of pay periods where missed deductions resulted in the establishment of the arrearage. Agencies are also reminded that when an ADV or ADJ is entered on the employee’s timesheet, the whole deduction amount received from KDHE will still be deducted from the employee’s paycheck. The ADJ/ADV amount is the Agency advancing monies to the employee. This is the same concept used prior to MAP to process health benefit adjustments in off-cycle that are now being processed in the on-cycle.
Example #1: Using ADV to spread collection of GHI adjustments over two pay periods
An employee has single coverage and had $20 per pay period deducted for their insurance since the beginning of the year. The employee changed to family coverage effective October 1st and the deduction should have changed to $200 per pay period.
As it is now November, the employee owes for 2 pay periods for the difference of $360. That is 2 pay periods of $200 less the $20 that was withheld. ($400 less $40) The calculated paycheck will show a deduction of $560, $200 for the current pay period, and $360 for the arrearage.
Assuming the employee cannot pay all of that at once without hardship; the agency can enter an ADV on the time sheet to set up part of the GHI difference as an arrearage to collect later.
To split the adjustment over 2 pay periods (the number of pay periods that were affected), the agency should collect $180 per paycheck. The first collection would be on the current pay period. The employee should pay the $200 current deduction and $180 of the difference.
To help the employee, the agency may “defer” collection of the remaining amount to the next on-cycle paycheck. In order to accomplish that, agency payroll staff will enter ADV on the time sheet for $180, the amount to collect on the next paycheck.
The paycheck will still reflect $560 as a deduction, but the effect on net pay, due to the ADV, would only be $380. SEHP will receive the $560 GHI deduction, and the employee now owes the agency $180 established as an arrearage to be collected on the employee’s next paycheck.
Example #2: Using ADV to spread collection of GHI adjustments over more than two pay periods
If the employee in Example #1 owed GHI for 3 pay periods of $180 each, the agency would still want to have the EE paying for the $380, but would establish an arrearage for $360. To collect that over the next 2 paychecks, the agency would need to set up a Maximum Arrears Payback of the ADVNCE for $180.
Again, SEHP will receive the full deduction of $740 since that is on the paycheck deductions, but the employee now owes the agency for the $360.
Example #3: Using ADV to collect for multiple health benefit deductions over multiple periods
If the employee owes for more than one health benefit deduction, for example the employee owes for GHI and HSA, the agency may enter one ADV amount to cover both deductions in order to carry over the collection to future paychecks.
Timing of Health Benefit Corrections:
Due to the timing for file reporting, if an agency identifies an error in one payroll calculation and has the item corrected in MAP, it may still take one or more pay periods before that correction comes through on the payroll interface file from MAP. The cutoff dates for MAP correction entries can be found on Informational Circular 15-P-009.
Online Check Calculations
Since the GHI, FSA and HSA information is no longer stored in the SHARP system, the deductions will not automatically pull into the Online Check calculations. When the paysheet is pulled up and agency staff are entering hours, it will be necessary to click on One-time Deductions and add any applicable benefit codes. It is only necessary to enter the Before-tax or After-tax deductions. Simply add a row on the deductions page to enter the next benefit deduction. Continue until all codes and amounts have been entered.
Once all health benefit deductions are entered, click on OK to be taken back to the paysheet. Continue to enter the earnings, click on the OK to Pay box(es) and Save and Calculate. If data must be changed to correct earnings, the entries made to the One-time Deductions will still be on that page, they will not need to change unless the wrong code or amount was entered.
When deleting the Online Check, those One-time Deduction row(s) are deleted as well. If the Online Check has been deleted and it is determined that another online check must be run for that employee, the One-time Deductions will need to be entered again.